Tobacco taxation policy in Slovenia in 2018

In 2012, Slovenia changed its structure of the cigarette excise tax by greatly increasing the specific excise rate, but decreasing the ad valorem excise rate. The reform was very beneficial for public health as it increased the price of the cheapest cigarettes disproportionately and thus decreased tobacco consumption within the country (by 20% in 2012-2014), and limited switching down to cheaper cigarettes outflow out of the country. However, the ad valorem excise decrease seems to be unreasonably high, and it was one of the causes that tobacco excise revenue did not increase in 2012-2015. Countries with mixed tobacco excise systems should be careful when changing their excise structure. While a large increase in the specific excise rate is the most beneficial change regarding health, ad valorem rates do not necessarily need to be reduced. Slovenia has a great opportunity to increase tobacco excise rates next year, which will be beneficial for both public health and governmental revenue. In 2018, we want to achieve the implementation of the Draft Law amending and supplementing the Law on tobacco excise duties. Article 1 of the Draft foresees an increase in the excise duty for cigarettes from €106 to €132 for 1000 pieces. This measure would significantly contribute to public health, and would nearly equalize tobacco prices in Slovenia and in other European Union Member States