Tax on all harmful things: why cigarettes are becoming more expensive in Azerbaijan

Cigarettes and alcohol in our retail chains are becoming more expensive again. The reasons for this should be sought not only in the appetites of business. The consistent rise in the price of harmful assortment on the shelves is explained by international obligations adopted by our country, writes the newspaper "Caspiy".

Azerbaijan adheres to the norms and rules of international policy to reduce the consumption of tobacco products. The main task on this path is effective taxation measures to make health-damaging goods less accessible to the population. According to experts from the World Health Organization, taxes on tobacco products are the surest way to reduce tobacco use. This is especially true for young people and low-income segments of the population. Thus, governments are advised to reduce people's healthcare costs and save finances.

Tax on all harmful products

Guided by this noble task and recommendations from authoritative international structures, the tax on the smoky assortment of our shelves grows from year to year. The last time excise taxes on cigarettes were increased was in the summer of last year. Then this indirect tax increased from 14 to 16 manats per 1,000 units of products. The tax also increased from 0.25 to 2 manats per piece for disposable electronic cigarettes, hookahs, and substitutes. Experts expected that the increased fees would affect release prices, but the price increase would not be significant.

Still, those with unhealthy habits are offered to pay more or give up the harmful addiction altogether. So in the fight against the tobacco epidemic, we are slowly but surely moving towards the goal. For many years, tobacco products in retail have been steadily rising, and the bad habit costs citizens more. However, the current increase does not have direct fiscal motives. According to expert data, duties and excise taxes have not changed in the current year, and the new rise in prices is a consequence of the growing costs of this business.

Prices heated up by inflation

Inflation raises the cost of production and imports, changing the price on the shelves, says economist Khalid Kerimli. According to his estimates, retail prices could have been affected by increased utility tariffs and starting salaries in the labor market:

- Is it worth explaining that a higher salary minimum increases the costs of entrepreneurs engaged in this field, - he notes. - If we add to this the dynamics of prices in the consumer market, it becomes clear that the price list for tobacco products simply cannot remain the same. After all, inflation affects the expenses of entrepreneurs. However, several large companies are engaged in the segment of production and sale of cigarettes, so specialists from the State Service for Antimonopoly Supervision and Consumer Market Control should still investigate the situation for the possibility of a cartel agreement.

Bringing order to the market

So, this week the most popular brands of imported cigarettes became more expensive. According to the already established tradition, the increase was insignificant: the cost of a pack of imported cigarettes rose by only 0.20 AZN. Along with the smoky assortment on the shelves, alcohol is also becoming more expensive. Firstly, the excise rate on alcohol is also steadily growing. And secondly, at the end of last year, by government decision, a special method was implemented in retail, designed to bring order to this market.

The supervisory authority determines the cost of alcohol based on the manufacturer's expenses. As a result, a minimum price is established - it covers not only