Until July, the State has already collected 826.5 million euros with the Special Tobacco Tax, which is another 78.6 million in homologous terms, according to the report of the latest budget implementation. An analysis of the government’s projections included in the State Budget (OE) for 2022 shows that the executive has already managed to fit in a further €58.6 million against the estimated surplus of €20 million. euros for this year, compared to 2021. the OE for 2022, the state treasury should receive 1.43 billion euros through the Tobacco Tax.
This year, the government decided to increase the specific components of the tobacco tax by 1%: the 101 euros per thousand cigarettes rose to 102.01 euros per thousand cigarettes. And kept the rate ad valorem 14%, which is levied on the price of a pack of tobacco. Then you still have to add VAT.
The former director of the tax authorities, António Brigas Afonso, revealed to Dinheiro Vivo that “about 80% of the income from the sale of cigarettes is taxes”. It remains to be seen whether António Costa’s government plans to raise this tax again for the 2023 state budget.
tax suspension
The special consumption tax law, which applies not only to tobacco but also to alcoholic beverages and drinks with added sugar or other sweeteners and petroleum products, allows distributors to purchase the products without having to pay tax in advance, provided they have a bonded warehouse or the status of a registered consignee for this, Brigas Afonso explains to Dinheiro Vivo. “Then they only have to deliver the tax due to the State on the last working day of the month following the date on which the good was put on the market”, emphasizes the specialist in excise taxes.
However, in the specific case of tobacco, there are situations where suppliers ask distributors to pay the tax when the product is purchased. After that, tobacco companies have about 45 days to deliver the tax to the state. Brigas Afonso explains that the tobacco market is dominated by an oligopoly “formed by two or three large companies that have the power to demand payment of the tax.”
The inspector emphasizes that “tobacco companies can refuse to sell in suspension to ensure that the distributor pays the tax”. “For example, if the company that bought with tax suspension does not confirm that it has received the product from the IRS, then it is the tobacco supplier or seller who has to pay the state,” Brigas Afonso warns.
From the point of view of the special tax expert, “this problem cannot be solved through a change in the law or through the state budget”. “This is mainly a competition problem,” he says. “It will be through the Competition Authority or the courts” that solutions can be found to prevent joint actions by tobacco companies, he says. This is one of the topics that will be discussed at the Dinheiro Vivo conference “Covid, war, inflation: how to adjust taxes in the OE2023”. The meeting will take place next Tuesday the 22nd at the Centro Cultural de Belém in Lisbon.
Salomé Pinto is a journalist for Dinheiro Vivo
Source: DN
