Higher Excise Duties on Tobacco, Alcohol…

The changes to the act raise excise on tobacco by 5% as of 1 May and moreover discontinue special tax breaks for biofuels mixtures.

The price of a pack of cigarettes will increase by an average 20 cents as a result, while a substantial burden is also being put on other tobacco products, notably rolling tobacco, whose sale has been on the increase in recent years.

Additional hikes were already secured with a government decree which was adopted on 14 April and raised excise on alcohol by 10%, as well as on fuel – the duty on petrol and gas rose about 2% and on diesel by 4.3%.

Excise is now at EUR 12.1 per one percent volume of alcohol per hectolitre for beer, EUR 132 per hectolitre of intermediate-strength drinks such as wine, and EUR 1,320 per hectolitre of 100% ethanol for hard liquors.

The government expects EUR 90m in additional tax revenue annually (about EUR 50m this year) on the back of higher excise, which will go a long way towards offsetting the estimated EUR 180m that the budget lost when the Constitutional Court repealed the real estate tax.

Criticism of the changes adopted today has come above all from the opposition, which pointed out that the sale of tobacco products in Slovenia had dropped 15% in the past year, but not as a result of fewer smokers but because of the use of unregistered and foreign products.

"Slovenia will merely finance the budgets of other countries," Andrej Šircelj of the Democrats (SDS) said.

MPs of New Slovenia (NSi) moreover disagreed with the focus on budget solutions via tax hikes and on such important changes being adopted in fast track procedure.

Businesses have also come out strongly against the higher excise duties, arguing the move will erode purchasing power and increase effective corporate taxation.

The Chamber of Commerce (TZS), which represents retailers, said too that turnover would drop as consumers will start buying cheaper goods abroad and from the black market.

The Chamber of Craft Industries and Small Business (OZS) said the move would disproportionately hurt smaller businesses, in particular in transport and the hospitality sector.

Meanwhile, the Chamber of Commerce and Industry (GZS) argued excise on petrol in particular would severely affect exporters and the manufacturing industry, in what amounts to an "own goal in efforts to kick-start growth".