Below is the list the most recent tobacco tax changes across the world. Note that there is a separate write-up on e-cigarette taxation.
November 2025: Bulgaria to Gradually Increase Tobacco and Nicotine Excise Taxes from 2026
Bulgaria will implement a phased increase in excise duties on all tobacco and nicotine products beginning in January 2026. The adjustment – approved as part of the 2026 state budget – covers cigarettes, cigars, smoking tobacco, heated tobacco sticks, and e-cigarette liquids, and will be rolled out over a four-year period. For the past decade, Bulgaria has maintained some of the lowest tobacco excise rates in the European Union, aiming to keep consumer prices down. Consequently, it currently ranks last among EU member states in tobacco taxation, including for new nicotine products.
Effective January 1, 2026, the excise duty on cigarettes will rise from €107.57 to €113 per 1,000 sticks. For a standard 20-stick pack, this represents an increase from €2.14 to €2.27 in excise, translating into an estimated retail price hike of about €0.20 after 20% VAT and markup adjustments by producers or retailers. Excise rates for cigars and cigarillos will increase from €202.47 to €212.70 per 1,000 units, while the duty on smoking tobacco will climb from €113 to €121.96 per kilogram. Heated tobacco products will see their rate rise from €204.74 to €214.74 per kilogram, adding €0.15-€0.20 to the price of a 20-stick heated tobacco pack. The same rate will apply to non-tobacco sticks designed for heated tobacco devices.
For e-cigarette liquids, the excise duty will increase from €0.23 to €0.25 per milliliter, regardless of nicotine content. This equates to an additional €0.05 for a 2 ml disposable vape and about €0.50 for a 20 ml refill bottle. Products bearing old excise bands will remain available for sale at previous prices until existing inventories are depleted in early 2026.
According to the Ministry of Finance, the revised excise framework is expected to generate an additional €130 million in budget revenue in 2026, alongside €26 million in VAT, as the latter is levied on the final retail price inclusive of excise.
October 2025: Mexico plans cigarette tax increase in 2026
The federal government’s 2026 Economic Package includes a proposed hike to the IEPS (Special Tax on Production and Services) on tobacco, which could lead to a price increase of at least MX$20 (US$1.1) per pack on average. According to the 2026 Economic Package, the ad valorem rate will raise from 160% to 200% and the specific rate will gradually increase from MX$12.2 (US$0.66) per pack (of 20) to MX$17 (US$0.92) per pack in 2026 and to MX$23 (US$1.25) per pack in 2030. The Ministry of Finance and Public Credit (SHCP) stated that the goal is to discourage consumption and channel public funds toward preventing and treating smoking-related diseases.
According to Mexico’s Confederation of Industrial Chambers (CONCAMIN), illicit tobacco market already accounts for more than 20% of total cigarette consumption, causing an annual fiscal loss of MX$13–15 billion (US$700-800 million). Illicit cigarette are sold for MX$25 (US$1.36) per pack in Mexico while the premium cigarette brands, such as Marlboro, retail at up to MX$85 (US$4.6). A pack of legal cigarettes would cost around MX$100 (US$5.4) if the Senate approves the economic package without a change.
July 2025: Turkey raises the tax on cigarettes
Special Consumption Tax on cigarettes are raised by 15.7% in the Turkey based on a periodical inflation adjustment. Tax increase results in a 5%-7% increase in retail prices depending on the price point. Japan Tobacco, second largest player in the market after Philip Morris International (PMI), adjusted its retail price list for Winston (₺85-₺96), Camel (₺82-₺86), LD (₺81) and Monte Carlo (₺80) brands and Camel RYO tobacco (₺195; 100 grams). Now the cheapest cigarette costs around US$2 in Turkey, world’s 4th largest cigarette market after China, Indonesia and Russia.
June 2025: Vietnam changes the cigarette excise tax system
Vietnam will shift from an ad valorem system to a mixed tobacco tax structure. The new tax on tobacco will be 75% ad valorem tax plus a specific tax starting with ₫2,000 ($0.08) per pack of cigarettes in 2027 and increasing annually to ₫10,000 ($0.40) per pack by 2031. The annual increase aims to prevent erosion of impact due to inflation. The initial increase is projected to raise cigarette retail prices by 16% in the first year.
The new law also introduces the country’s first excise tax on sugar-sweetened beverages, a policy proven to help curb consumption of these unhealthy products. The policy introduces an 8% excise tax on sugar-sweetened beverages, defined as products with sugar content exceeding 5g per 100ml, starting in 2027, rising to 10% in 2028. This measure is a step to address the country’s rising rates of obesity and diet-related non-communicable diseases, particularly among children and adolescents, and it opens the pathway to continue strengthening tax rates on sugar-sweetened beverages.
December 2024
Japan: After a year delay, the Government plans to increase the tobacco tax as early as April 2026 in order to finance the doubling of defense spending to 2% of GDP by 2027. The tobacco tax will be first raised for heated tobacco to match the rate for cigarettes. This harmonization will be followed by three hikes in the overall rate from April 2027 to April 2029.
Indonesia: Machine-made cigarette prices will rise 5%-8% in 2025 under the new rules set by the Finance Minister Regulation (PMK) No. 97/2024 on tobacco excise1. According to the new regulation, the retail price of cigarettes cannot be set below the minimum price limits defined in the law. These limits are based on the category and type of cigarette, ensuring that prices reflect the excise tariff and the public health objectives.
Effective January 1, 2025, the following retail price per stick increases will apply to cigarettes.
– Machine-made Clove Cigarettes (SKM): Class I: Min Rp 2,375 (up +5.1%), Class II: Min Rp 1,485 (up +7.6%) => Gudang Garam International, Djarum Super, and Sampoerna A Mild
– Machine-made White Cigarettes (SPM): Class I: Min Rp 2,495 (up +4.8%), Class II: Min Rp 1,565 (up +6.8%) => Marlboro, Lucky Strike, and Dunhill
– Hand-rolled Clove/White Cigarettes (SKT/SPT): Class I: Min Rp 1,550-2,170 (up +9.5%-13%), Class II: Min Rp 995 (up +15%), Class III: Min Rp 860 (up +18.6%) => Kotak Ajaib, Vigor Kretek, and Vigor Teh Manis
– Hand-rolled Clove/White Filter Cigarettes (SKTF/SPTF): No class: Min Rp 2,375 (up +5%)
November 2024
Poland: Excise duty on tobacco products will increase by 25% from January 2025. Accordingly, price of a pack of cigarettes will surpass the zł20 (US$4.9) level2. Further tax increases are planned in the coming years with a pack of cigarettes to cost around zł23.85 (US$5.8) in 2026 and zł26-27 (US$6.5) in 2027. Currently, a pack of cigarettes costs around zł17-18 (US$4.3) in Poland.
In addition to the tobacco products, excise duty for a millimetre of e-cigarette liquid will be raised to zł1.8 (US$0.44). The Polish Government predicts that excise tax increases will bring an additional revenue of zł3.5 billion (US$850 million) on an annual basis. In Poland, illicit trade in tobacco products currently corresponds to only 3.6% of duty-paid sales volume; however, sharp excise-driven price increases could result in a surge of illicit trade considering Poland’s geographical proximity to the main sources of the illicit manufacturing.
Finland: The Finnish government will raise taxes on tobacco products twice a year until July 2027 for a total increase of 27% in six tranches3. At the end of the raising cycle, a pack of cigarettes will cost an average of around €13.20. The Government aims to collect €100 million in additional excise taxes during this period. The tax increases will apply to cigarettes, loose tobacco, pipe tobacco, cigars and cigarillos. However, nicotine pouches and e-cigarette liquids will not be affected by these hikes.
October 2024
UK: The British Finance Minister announced the budget plans to the Parliament, seeking to shore up public services and reduce the funding gap while promoting growth and investment. As part of the plan, the Government will
– renew the Tobacco Duty escalator for the remainder of the parliamentary term at RPI+2% (i.e. 2% more than the Retail Price Index)
– increase duty by a further 10% on hand-rolling tobacco in 2024
– introduce a flat rate duty on vaping liquids from October 2026 and, concurrently, further increase tobacco duty on a one-off basis to maintain the incentive to quit smoking.
March 2024
UK: The UK Government will introduce a new duty on vaping products4 from 1 October 2026 with registrations for the duty opening from 1 April 2026. The rates will be £1.00 per 10ml for nicotine free liquids, £2.00 per 10ml on liquids that contain 0.1-10.9 mg nicotine per ml and £3.00 per 10ml on liquids that contain 11mg or more per ml. A 12-week consultation will be published on the policy design and technical details alongside the Spring Budget. Recognizing the role vapes play in helping people quit smoking and in order to maintain the price differential between cigarettes and vapes, the Government will also introduce a one-off tobacco duty increase of £2.00 per 100 cigarettes or 50 grams of tobacco from 1 October 2026.
February 2024
UK: The UK government is considering to introduce a vape tax and raise the tobacco duty at the Budget announcement on March 6. The potential move could come as part of a wider package that aims to reduce overall taxation (i.e. lower income tax or national insurance deduction).
Vapes are currently subject to VAT, but not to a separate excise tax. It is speculated that the new duty will be levied on the liquid in vapes – with higher tax rates for products with more nicotine. Tobacco duty will also be increased accordingly to ensure the price differential versus vaping. Treasury sources suggest that the new vape tax and tobacco duty increase could raise around £500Mn a year for the government.
With £1.5 hike (for 20-pack) being considered on March 6, the average cost of cigarettes (20-pack) could increase to almost £16 (from £14.4). In 2023, the UK cigarette market experienced a record high decline of 17% in one year. Japan Tobacco and Imperial Brands (8% of net revenue) are the most exposed to the UK tobacco market. BAT and PMI have a minimal exposure.
November 2023
UK: As announced at Autumn Statement 2023, the duty rate on all tobacco products increases5,6 by the tobacco duty escalator of 2% above RPI (Retail Price Index: 5.4%) from 22 November 2023. The duty rate for hand-rolling tobacco is increased by an additional 10% (i.e. 12% above RPI inflation) in order to narrow the gap versus the cigarette duty. It is estimated the tax hike will only bring in £40Mn extra for the Treasury in 2024. Taxing tobacco is an important revenue-raiser for the government with £10.7Bn collected in 2022.
The current revision follows the 12.1% duty hike that went into effect in March 2023 and will result in £0.66 increase in the average retail price for a pack of 20 cigarette. Accordingly, average RSP will increase from £12.8 in January 2023 to £15.4 in November 2023 (- a whopping 20% increase in less than a year).
October 2023
Portugal: According to the 2024 Budget proposal7, ad valorem excise tax will decrease from 12% to 1% while specific excise tax will increase from €112.5 to €151.9 per thousand cigarettes (€3.04 per pack). Accordingly, a pack of 20 cigarettes will increase from €5.00 to €5.30 – or to €5.40 if the manufacturers use the option to add €0.10 margin (i.e. 6%-8% RSP increase). Budget proposal also includes a paradigm shift in taxation by indexing the excise on other tobacco products (cigarillos, roll-your-own as well as RRP/NGPs) to the cigarette excise: heated tobacco (now ~20% of the market) to be taxed at 50% of the cigarettes while e-cigarettes to be taxed at 25% (or, 12.5% if nicotine-free).
In addition, the budget proposal introduces a clause stating that Portugal’s average tax burden on tobacco cannot be lower than that of the EU and, thereby, providing a mechanism to automatically update the tobacco excise tax in the future.
Ireland: The Irish Government announced that it will increase the excise duty on a pack of 20 cigarettes by 75 cent, bringing the pack price to €16.758. Ireland already has the highest cigarette price in the EU. Moreover, Irish Minister of Finance stated that next year’s budget will include a new domestic tax on e-cigarettes as the revision of the EU TPD Directive is being delayed. The Irish Heart Foundation called for a 10 cent tax per ml of e-liquid, which would increase the cost of single-use vapes by €2.
September 2023
In a re-balancing act, Sweden is planning to reduce the snus excise tax by 20% while increasing the cigarette excise tax by 9%9. “The health-damaging effects of smoking are significantly more noticeable than snus”, explains a ruling party spokesperson. The modifications will take effect on November 1, 2024.
September 2023
The French government is planning to increase the cigarette price (pack of 20) to €12 as of 2024 and to €13 by 202710. Anti-smoking lobby calls for €16 by 2027. France has the highest cigarette prices in continental Europe (ex-UK & Ireland). Almost half of the illicit cigarette trade in the EU takes place in France.
September 2023
Effective Sept 1, 2023, the New York State excise tax on cigarettes increased by $1 to a total of $5.35 a pack11 – marking the first increase since July 1, 2010 when the excise tax was increased from $2.75 to $4.35 a pack. In addition, NY City has a local excise tax of $1.50 a pack (i.e. $6.85 a pack total excise plus 8.875% sales tax).
Following this increase, New York became the state with the highest cigarette tax in the US12. Currently, Missouri has the lowest cigarette tax in the US – just $0.17 per pack. More than half of all states have not increased their taxes on cigarettes in the last ten years.
August 2023
In Australia, a pack of 25 cigarettes is going up in price to AU$50 (US$32) from Sept as a result of higher taxes13. Meanwhile, Australian supermarket sales are being squeezed by the growing illicit tobacco trade – a situation described as the “single biggest issue” for the store owners.
March 2023
The average cost of 20 cigarettes is set to soar past £14 in the UK as the Government confirms that tobacco tax will increase with the rate of inflation14. Currently, the average cigarette price (for a pack of 20) is £12.84 in the UK.
Background:
The tobacco excise tax (“sin tax”) is a levy imposed on tobacco products (supposedly) to reduce tobacco consumption and to generate funding for the healthcare programs linked to tobacco use. Excise taxes constitute a large share of cigarette prices in most countries. For instance, in the EU, excise duties make up 64% of the average cigarette retail selling price (RSP). The total tax rate reaches 82% of the RSP when the value-added tax (VAT) is included. Accordingly, both cigarette prices and the industry profitability are highly dependent on the progression of excise tax structures/levels.
Footnotes:
- https://jakartaglobe.id/news/cigarette-prices-to-rise-by-58-pct-in-2025-under-new-regulations ↩︎
- https://warszawawpigulce.pl/prezydent-podpisal-od-stycznia-co-piatego-polaka-czekaja-drakonskie-podwyzki ↩︎
- https://yle.fi/a/74-20121721 ↩︎
- https://assets.publishing.service.gov.uk/media/65e8581eea2f36001a3c8970/E03057752_HMT_Spring_Budget_Mar_24_TEXT_20pt_LP_PRINT__2_.pdf ↩︎
- Increases to tobacco duty rates from 22 November 2023 – GOV.UK (www.gov.uk) ↩︎
- https://www.legislation.gov.uk/ukpga/1979/7/schedule/1 ↩︎
- Tobacco packet will rise by at least 30 cents in 2024 – ECO (sapo.pt) ↩︎
- https://www.irishtimes.com/your-money/2023/10/10/cigarettes-to-increase-by-75c-a-pack-and-vapes-to-be-taxed-next-year/ ↩︎
- https://nordictimes.com/economy/tax-on-snus-to-be-reduced ↩︎
- https://www.euractiv.com/section/health-consumers/news/french-anti-smoking-lobby-plans-for-e12-pack-lack-ambition ↩︎
- https://www.tax.ny.gov/bus/cig/cigidx.htm ↩︎
- https://www.forbes.com/sites/kellyphillipserb/2023/09/05/new-york-now-has-the-highest-cigarette-tax-as-rates-stay-flat-in-most-states ↩︎
- https://www.afr.com/companies/retail/illegal-tobacco-rising-cigarette-prices-dent-supermarket-profits-20230731-p5dsll ↩︎
- https://www.dailymail.co.uk/news/article-11863147/Cost-cigarettes-rise-taking-average-price-20-13.html ↩︎
