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Tax Gap of Heated Tobacco Products in Bosnia and Herzegovina
Article 6 of the Law on Excise Duties in Bosnia and Herzegovina (Official Gazette of BiH, 49/09, 49/14, 60/14 and 91/17) lists the types of tobacco products that should be subject to tax: cigarettes, cigars and cigarillos, and smoking tobacco (cut tobacco for rolling cigarettes and other smoking tobacco). Tax policy is under the responsibility of the Indirect Taxation Authority of Bosnia & Herzegovina.
As of Jan 1, 2020, new products (heated tobacco and e-cigarettes) are not listed in the tax code. By default, heated tobacco falls into the category of “smoking tobacco,” which is currently taxed at a rate of BAM 121.6 per kilogram tobacco.
As of 2020, cigarettes were taxed according to a mixed system, which relies more heavily on the ad-valorem excise component than the specific excise component. The system includes:
- ad-valorem excise, currently 42% of the retail price,
- specific excise, indexed to increase annually with inflation, currently BAM 82.50 per 1000 sticks,
- minimum excise tax, currently 152 BAM per 1000 sticks.
The specific excise for cigarettes did not change in 2021.
Sources:
- Petković, S., D. Gligorić, J. Ateljević, A. Pepić and B. Vukojević. “Accelerating Progress on Effective Tobacco Tax Policies in Low- and Middle-Income Countries, National Study– Bosnia & Herzegovina.” University of Banja Luka, Feb 2019.
- Indirect Taxation Authority:
http://www.new.uino.gov.ba/bs/Dostava-popisnih-lista-i-uplata-razlike-akcize-prema-Odluci-o-utvr%C4%91ivanju-specifi%C4%8Dne-i-minimalne-akcize-na-cigarete-i-iznosa-akcize-na-duhan-za-pu%C5%A1enje-za-2021.-godinu - Council of Minister, Bosnia and Herzegovina , “Economic Reform Program for 2018-2020”, Bosnia and Herzegovina, Jan 2018.
Last Updated Feb. 20, 2021