Tabacco excise revenue falls short of 2000 budget target; 2001 looks similar

In 2000 revenues generated through excise tax on tobacco fell far short of the 2000 budget target of zl.7.9 billion, amounting to about zl.6.3 billion, according to calculations made by Zwiazek Pracodawców Przedsiebiorstw Dystrybucyjnych (ZPPD), a professional association of distributors in Poland. Moreover, it appears that 2001 will also see planned budget revenues from tobacco excises fall short. According to the Finance Ministry, tabacco excises are to amount to zl.8.5 billion, an increase of 37% year-on-year. However, ZPPD President Jan Adamski believes that the ministry would have to increase the tax by about 45% to achieve the budget's anticipated revenues. In January 2001, excise tax on tobacco grew by 19%. Industry experts contend that any substantial excise hike on tobacco will spell higher cigarette prices, in turn spurring increased cigarette smuggling and, ultimately, less income for the budget. It is still unknown whether the ministry will move to increase the excise within the year. (Rzeczpospolita, p. B2) A.D.