Tobacco distributors complained they pay 20 euros for 1,000 tax stamps, which is much higher compared to rates applied in neighbouring countries and 10 times higher compared to Kosovo
TIRANA, Nov. 13 – Tobacco importers in Albania have called on government to review the deal with the concession company issuing fiscal stamps and apply a gradual increase of excise rate on tobacco. In a meeting this week with the parliamentary committee on productive activities and trade, tobacco importers expressed their concern over the high rates they pay on fiscal stamps compared to regional countries. Tobacco distributors complained they pay 20 euros for 1,000 tax stamps, which is much higher compared to rates applied in neighbouring countries and 10 times higher compared to Kosovo where companies pay 2 euros per 1,000 stamps.
Importers, which are exclusive distributor of international tobacco brand in Albania, also demanded that the excise rate on tobacco, currently at 70 lek (Euro 0.5) per packet, is not increased by more than 10 lek in the new fiscal package government is drafting.
Back in 2011, Switzerland-based Sicpa was awarded a 10-year concession to produce and establish a tax stamps control system on tobacco, alcohol and pharmaceutical products. According to a Finance Ministry statement, 1,000 stamps for tobacco products cost 20 euros, compared to 32 euros for alcoholic beverages, 22 euros for beer and 14.43 euros for medicines.
In Jan. 2011, the excise on tobacco products was raised by 20 lek per packet, climbing to 70 lek. The draft law was compiled in cooperation with the Health Ministry and was intended to bring tobacco excise taxes in line with regional and EU countries, considering that currently, a packet of cigarettes in Albania is quite cheaper than in EU countries.
Cigarette prices in Albania for the most popular brands vary from 180 lek to 270 lek (Euro 1.9) per packet.
Albania has 872,000 smokers out of a population of three million, with one of Europe’s highest smoking rate. Albanians spend more than 300 million euros on tobacco products every year.
Although smoking has been banned in enclosed public spaces since May 2007, the law continues largely being ignored mainly because of lack of appropriate structures and necessary staff to supervise bars and restaurants.
Domestic/Imported tobacco
Domestically produced tobacco has sharply dropped in the past 14 years, shows a study carried out by Open Data research centre. Lack of domestic industry on cigarette manufacturing after the collapse of the communist regime in the early 1990s, failure of the agri-cultural policies and competition from imported cigarettes have led to a sharp decline of 3.7 times in the cultivation of tobacco during the 1998-2012, says Open Data research centre.
Statistics from the Agriculture Ministry show domestic tobacco production dropped from 7,400 tonnes in 1998 to 2,000 tonnes in 2012. Since 2007, when domestic tobacco cultivation reached its lowest level of only 900 tonnes, domestic production has been on an upward trend.
Because of lack of manufacturing industry, more than half of domestic tobacco is exported mainly to Kosovo.
Tobacco imports meet most of the country’s domestic demand. However, since 2008 when tobacco imports reached 4,391 tonnes, imports of cigarettes have been on a downward trend affected by higher prices and excise taxes. The share of imported cigarettes dropped to 64.8 percent in 2012 while the share of domestically produced tobacco rose to 35.2 percent, according to Open Data.
Tobacco imports in 2012 dropped to 3,689 tonnes, up from 3.277 tonnes in 2011, but down from 4,589 tonnes in 2010 and 4,391 tonnes in 2008.
Tobacco importers say there has been a shift toward hand-rolled unprocessed tobacco which is mainly sold on the black market and mostly produced in the mountain areas in the northern region of Shkodra.
