Excise taxes on tobacco products

In accordance with the Agreement, the EAEU countries must apply an indicative rate of 35 Euros for 1 thousand cigarettes, with the right to deviate by 20% in a smaller or larger direction from 2024. At the same time, a phased harmonization of excise taxes on tobacco products is envisaged.

"The draft Agreement provides for the application of 2024 indicative rates and deviations from it; the granting of EEC Council to authorize the indicative rates of excise duties and their change with a reasonable economic feasibility", - Asset Irgaliyev, Minister of National Economy of Kazakhstan said at the plenary meeting of Mazhilis.

According to the head of the department, the draft law will provide additional revenue to the budget by increasing the excise tax rate on tobacco products. The agreement will ensure a common practice in the field of excise taxation of tobacco products on the territory of the member states of the Eurasian Economic Union.

Nurlan Nigmatulin, Chairman of the Mazhilis, believes that prompt response to changes in the market when determining excise rates for tobacco products will contribute to both the interests of Kazakhstan and the fulfillment of our country's obligations under the relevant Agreement of the EAEU.

During the meeting, Nigmatulin drew attention to the impact of the European currency exchange rate on excise rates and retail prices for cigarettes.

As explained by Asset Yergaliyev, the Minister of National Economy, in the event of a sharp change in the exchange rate, each of the EAEU member states has the right to apply to the Eurasian Economic Commission with a request to review the indicative excise tax rate. And the decision is made when a full consensus is reached, i.e. when all the members of the EAEU agree.

"This is a very important point. Here, a lot of things will depend on the employees of the Ministry of National Economy, as well as our representatives in the Eurasian Economic Commission, and their prompt response to all changes in the course. It is necessary to take timely measures to comply with both the interests of Kazakhstan and the obligations of our country under this Agreement, " Nurlan Nigmatulin concluded.