The Croatian government on Thursday decided to increase excise taxes on gasoline and diesel by HRK 0.20 per litre as well as to raise excise duties on tobacco products in order to increase state budget revenues, with the explanation that this decision arose from Croatia's obligation to curb excessive macroeconomic imbalances, as requested by the European Commission.
Higher excise taxes on cigarettes and tobacco products mean that revenues from this source would increase by HRK 150 million on the year, according to the finance ministry's estimates.
Finance Minister Boris Lalovac said that Croatia would have to additionally raise tobacco excise taxes in the coming years in order to reach the average EU level in this sector.
He estimates that higher excise duties would increase the price of a cigarette pack by between HRK 0.60 and 0.90.
TDR fears that the consequence of such moves will be further exhaustion of consumers and a loss of jobs in the tobacco industry.
It notes that the portion of taxes in the final retail price of cigarettes is over 70%.
(EUR 1 = HRK 7.6)