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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. 



Last Updated Feb. 20, 2021