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Tax Gap of Heated Tobacco Products in Albania
At the end of 2018, the Albanian Parliament approved amendments to its tax law (Law no. 98/2018 of December 3rd, 2018) which introduced an excise tax on heated tobacco products. The law went into effect on January 1st, 2019.
Since January 1st, 2023, heated tobacco is subject to a specific excise tax of ALL 7,250 per kg, whereas the excise tax on cigarettes (also a pure specific excise tax) is ALL 7,000 per 1000 cigarettes. In effect, this means that the tax burden of a pack of heated tobacco sticks is less than 1 to 3 of that on a pack of conventional cigarettes.
Cigarette tax rates are scheduled to increase in line with expected inflation, as follows:
- From January 1st, 2024: ALL 7,750 per kg for heated tobacco and ALL 7,250 per 1000 cigarettes
- From January 1st, 2025: ALL 8,250 per kg for heated tobacco and ALL 7,500 per 1000 cigarettes
- From January 1st, 2026: ALL 8,750 per kg for heated tobacco and ALL 7,750 per 1000 cigarettes
Sources:
- Amendments no. 61/2012 to Law no. 98/2018 date 03.12.2018, "On Excises in the Republic of Albania"
- Albanian Customs Administration: Calculation of Excises in Albania
Last Updated Sept. 1, 2023