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Tax Gap of Heated Tobacco Products in North Macedonia

Republic of Macedonia amended its Excise Law May 2019 to include heat-not-burn tobacco in the category “non-combustible tobacco products” (Art.77, 80, 82). Art. 84(6) sets the excise duty on heated tobacco at MKD 2,500 per kilogram of tobacco mixture and 0% of the retail price, effective July 1, 2019. The law includes an increase to MKD 2,800 starting July 1, 2020, MKD 3,150 starting July1, 2021, MKD 3,550 starting July 1, 2022, and MKD 4,000 starting July1, 2023 (Art. 124).

Cigarettes are subject to a mixed excise system including an ad-valorem excise based on the retail price, and a specific excise tax based on sticks, and a minimum excise tax based on sticks. As of July 1, 2020, the specific excise was MKD 2.473 per stick, and is scheduled to increase to MKD 2.493 starting July 1, 2021, MKD 2.513 starting July1, 2022, and MKD 2.533 starting July 1, 2023. The minimum excise was MKD 2.673 per stick and is scheduled to increase to MKD 2.693 starting July1, 2021, MKD 2.713 starting July 1, 2022, and MKD 2.733 starting July 1, 2023.

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Last Updated Feb. 22, 2021