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Tax Gap of Heated Tobacco Products in Portugal

Heated tobacco products were introduced in Portugal in 2016 with the launch of IQOS by Philip Morris International.  In 2014, the Special Consumption Tax law was amended to create a new tax category for heated tobacco which went into effect in 2015 (Law no.82-B/2014). A heated tobacco product is defined as a “manufactured tobacco product especially prepared to emit a vapor without combustion of the tobacco mixture it contains” (Article 101 Paragraph 9). A mixed excise tax system is applied to heated tobacco. As of 2020, the specific excise tax rate is EUR 83.7 per kilogram, the ad valorem excise rate is 15% of the retail sale price, and the minimum excise is of EUR 180 per kilogram.

Portugal applies a mixed excise tax system to cigarettes. The current specific excise tax rate is EUR 101 per 1000 sticks, the ad-valorem excise rate is 14% of the retail sale price. The calculation of the minimum excise is described in Article 101 or the code and based on the weighted average retail price (WARP) of the previous year. It is EUR 136.75 per 1000 sticks.


Last Updated Feb. 25, 2021