Acta Oeconomica Pragensia 2016, 24(3):35-52 | DOI: 10.18267/j.aop.535

Disproportion in Taxation of Tobacco Products in the Czech Republic and Selected Neighbouring Countries

Lenka Miltáková, Jana Stavjaňová
Vysoká škola ekonomická v Praze, Fakulta financí a účetnictví (xmill11@vse.cz; xmorj12@vse.cz).

The goal of the paper is to asses differences between taxation of various tobacco products in the Czech Republic, Poland and Slovakia. When comparing the taxation of cigarette and fine cut tobacco, it is usually expected that one cigarette is equivalent to 1 gram of tobacco, while the European Commission uses a conversion rate of 0.75g. However, to accurately evaluate this disproportion, the real volume of tobacco contained in one cigarette was weighed using calibrated scales. Our experiment showed that the excise duties on tobacco are between 80-51% of the cigarette taxation in the Czech Republic; the range is between 78-47% in Slovakia and 67-37% in Poland, depending on the conversion rate. Even if it is highly unlikely that taxation of both products could be fully equal, we still believe that there is a potential for increasing taxation of fine cut tobacco, which could increase tax revenues by 0.7-2.7 billion CZK in the Czech Republic.

Keywords: excise duties, tobacco products, taxation of cigarettes, taxation of tobacco, disproportional taxation, tax revenues
JEL classification: H21, H23, H25

Published: June 1, 2016  Show citation

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Miltáková, L., & Stavjaňová, J. (2016). Disproportion in Taxation of Tobacco Products in the Czech Republic and Selected Neighbouring Countries. Acta Oeconomica Pragensia, 24(3), 35-52. doi: 10.18267/j.aop.535
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