Polish Ministry Of Finance: Urgent Review Of The Consumption Tax Amendment Is Needed, And E-cigarette Tax May Be Enacted Separately

Polish Ministry of Finance: Urgent review of the consumption tax amendment is needed, and e-cigarette tax may be enacted separately

The Polish Ministry of Finance recommended that the government adopt a draft law to amend the excise tax rate, which no longer includes provisions for taxation of vaping devices, and e-cigarette taxes will be handled by separate legislation.

According to Biznes.Interia on September 25, the Polish Ministry of Finance stated in a letter to the Prime Minister's Office that the Standing Committee of the Council of Ministers passed a draft law to amend the excise tax rate and recommended that the government adopt the draft. The project does not include provisions for the imposition of excise taxes on vaping devices.

The letter reads: "The project has been approved by the Standing Committee of the Council of Ministers and recommended to the Council of Ministers."

According to the latest draft bill on the revision of the excise tax on tobacco products, budget revenue in 2025 is expected to be 3.5 billion zlotys (US$900 million), while the initial version is expected to be 4.2 billion zlotys (US$1.1 billion). This means that the public treasury will lose 700 million zlotys (US$180 million) in revenue.

In this project, vaping devices will no longer be taxed, which will be handled by a separate bill. The Ministry of Finance asked the Prime Minister's Office to deal with the excise tax bill as a matter of urgency.

"Given the urgency of the matter, I implore the Council of Ministers to consider the bill as soon as possible."

In July, Finance Minister Andrzej Domański said that alcohol excise taxes would be raised by 5% in accordance with the plan formulated by his predecessor, and tobacco product taxes would be significantly increased.

According to the minister's summer announcement, the excise tax on traditional cigarettes may increase by 25% from the new year. E-cigarettes, especially the e-liquid used for filling, are expected to increase their excise tax by 75%.

In addition, media reports in September said that the Polish government may consider the criticism from the tobacco industry and divide the increase in excise taxes into two stages. The first stage will be implemented on January 1, 2024, and the second stage is scheduled to take effect on May 1, 2025.