Current finance minister Bohuslav Sobotka proposes that cigarette excise tax increase should be passed by year end. However no specific numbers concerning minimum, specific or ad valorem items has been mentioned.
Our view:
The excise tax increase from 1 January 2007 has been expected, as it is another step to reach excise tax level of 57% of retail price for most popular price category and EUR 64 per 1,000 pieces by 31 December 2007. No matter what government will result from the deadlock, excise tax increase will have to be applied to meet the EU requirements.