Tax hike on cheap cigarettes to cut smoking

20 January 2006

MADRID — The government has increased taxes on low-price cigarettes which are sold for less than EUR 1.80 a packet.

It will mean tobacco companies will have to pay EUR 6.20 in tax for every 1,000 cigarettes they make – a rise of 0.1 percent.

But whether the companies make smokers pay for the tax hike is up to them.

María Teresa Fernández de la Vega, deputy prime minister, said one of the priorities of the government was the fight against smoking.

A tough new law which came in on 1 January bans lighting up at work among other measures.

But De la Vega said cheap cigarettes were preventing more people from giving up.

They represent 17 percent of tobacco sales compared with only 7 percent in January last year, according to the Association of Tobacco Companies.

The government cannot raise the price of cheap cigarettes because of European Union norms on price-fixing.

And tobacco industry sources said cheap cigarette sales were expected to continue to rise, despite the increase in taxes.

[Copyright EFE with Expatica]

Subject: Spanish news