The price of a pack of cigarettes will increase by about 20 cents (about 7,7 percent) from January next year due to a new increase in excise duties, followed by five more similar price increases every six months until the end of 2028, so that the cheapest pack in legal sales will then cost over four euros.
This follows from the proposed amendments to the Law on Excise Duties sent by the Government to the Parliament, which envisages a new excise calendar for tobacco products as well as the introduction of new nicotine products into the calculation of excise duties.
From the Cabinet of the Minister of Finance News of Vuković They told "Vijesti" that according to these changes, from January 1st next year, the specific excise tax will amount to 58,85 euros per 1.000 cigarettes (50 packs), compared to the previous 53,50 euros, while the proportional tax will remain unchanged. The amount of excise tax is included in the VAT calculation base.
"The minimum excise duty on cigarettes will amount to 98,05 euros per 1000 pieces. The cumulative application of the above excise rates will lead to an increase in the minimum excise duty by 0,13 euros per pack, including VAT, which is why a slight increase in retail prices of cigarettes can be expected after January 1, 2026. According to our estimate, this increase will not exceed 0,20 euros per pack. However, the final decision on the level of retail prices of cigarettes is made by manufacturers and importers, in accordance with market circumstances and their own pricing policy," the Ministry of Finance told "Vijesti".
They state that the proposed amendments to the Excise Law foresee a moderate and necessary price increase, in line with the planned semi-annual increase in the specific excise duty, which will amount to 94,78 euros per 1.000 cigarettes by the end of 2028, as well as an increase in the minimum excise duty, which will reach 139,80 euros in the same period.
"Given the above increases in excise rates and minimum excise duty, in the coming period it is expected that retail prices of cigarettes will increase twice a year, with their amount depending on the business policy of each individual manufacturer and importer. In the previous period, certain increases in excise rates on cigarettes were not accompanied by an adequate increase in retail prices accordingly, and there were also cases of price reductions for the best-selling cigarettes. This is supported by the fact that the lowest retail price of cigarettes on the market is 2,80 euros per pack, and that the average weighted price of a pack of cigarettes is 3,10 euros, which is used for calculating excise duty," the Ministry of Finance stated in response to a question from "Vijesti" about how the increase in excise duties will affect price increases.
The government's excise policy in the area of tobacco products has so far, they stated, been "aimed at gradually increasing excise rates to the level applicable in the European Union, while respecting the dynamics of harmonisation, in order to preserve market stability and ensure regional harmonisation" in order to prevent cross-border smuggling.
"In this sense, in order to further harmonize the excise duty on cigarettes with the requirements of Directive 2011/64/EU, which stipulates that the minimum excise duty on cigarettes may not be lower than 90 euros per 1.000 pieces, the aforementioned minimum was reached as of 1 January 2025, when it was set at 91,50 euros. Bearing in mind that amendments to Directive 2011/64/EU on the structure and rates of excise duties on manufactured tobacco are underway, and that the amendments will also be aimed at increasing the minimum threshold for cigarette taxation, we consider it necessary to continue to pursue a responsible excise policy in the area of tobacco products. Such an approach contributes in the long term to reducing the consumption of tobacco products, especially among young people, as well as reducing the burden on the healthcare system in the coming decades," the Ministry stated.
"Vijesti" also asked whether the Ministry had information on whether excise duties on tobacco products would also increase in neighboring countries and whether additional increases in tobacco product prices could lead to the growth of the black market again, as happened in 2017 and 2018.
The Ministry responded that they are committed to a strong fight against the illegal trade in tobacco products by taking decisive and continuous measures.
"Official data from the Ministry of Finance confirm significant positive results achieved in the tobacco products market, especially cigarettes, since 2020. Namely, in 2020, cigarette turnover amounted to 607,41 tons, after which continuous growth of the legal market was recorded: in 2021, growth of around 35% (215 tons), in 2022, around 75% (452 tons), in 2023, around 86% (523 tons), and in 2024, growth of around 102% (617 tons) compared to 2020," the Ministry stated.
They recall that the key measure in the previous period was the Government's decision from 2021 prohibiting the storage of tobacco products in the Free Zone of the Port of Bar, as well as the Government's decision of September 5, 2024 revoking the consent to establish the free zone "New Tobacco Plant".
"The implementation of these decisions and the conduct of a predictable excise policy on tobacco products has yielded visible results that have brought multiple effects, namely the suppression of illegal trade, as well as the result of cigarette trade through legal channels, while at the same time we are recording an increase in revenue from collected excise duties. The application of the new excise calendar on cigarettes, starting from January 1, 2026, does not expect any disruptions in the tobacco products market. On the contrary, the achieved results are encouraging and indicate that further positive trends can be expected in the coming period. Taking into account the experiences from 2017 and 2018, when the specific excise duty was increased by around 33% (from 30 to 40 euros), we emphasize that the current increases cannot be compared with those of the time, and therefore a repetition of the negative market effects from that period is not expected," the Ministry stated.
When asked by "Vijesti" how much of the retail price of a pack of cigarettes in the amount of three euros does the state receive, the Ministry stated that the state is entitled to 76,45 percent of that price based on the calculated excise duty and VAT, which would be 2,29 euros.
The directive has not even been adopted in the EU yet, there will be more room for smuggling, the difference is over a euro per pack
Interlocutors of "Vijesti" from the tobacco product trade said that this additional increase in excise duties is controversial on several grounds, and that it will cause the growth of the illegal market.
They point out that the amendment to Directive 2011/64/EU, to which the Ministry refers, has not yet been verified, that is, it is still in the harmonisation phase and that there are very conflicting positions among EU member states.
The directive itself, if adopted, will enter into force for its members on January 1, 2028, with a gradual increase in excise duties on tobacco products, and Montenegro is already starting its implementation two years earlier, on January 1, 2026.
They also point out that this proposal will make cigarettes in Montenegro significantly more expensive than in the region, and that in three years a pack of the cheapest cigarettes in legal sale will cost at least four euros.
They said that a pack of cigarettes now costs two euros on the black market, while the cheapest one in legal sales is now 2,80.
"As early as January, the difference will be one euro, and it will only increase every six months by about 20 cents. That is a big difference and enough to interest people in the gray market, but also consumers to make significant savings by buying on the black market," the source said.
They also pointed out that now all duties contribute to the retail price of the pack at 81 percent, while 19 percent goes to covering the costs of manufacturers, importers and traders. That is, for a pack price of three euros, duties are 2,43 euros, and 57 cents remain to cover all costs and profits of manufacturers, importers and traders.
In explaining the amendments to the law, the Ministry states in one place that it will lead to an increase in state revenues, and in another that it will improve health because sales will decrease.
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