Albania Raises Taxes on Cigarettes

"We want to protect the health of citizens who are exposed to smoking and also reduce the rate of smoking," the Minister of Health, Mentor Beqaj, said, explaining the latest tax hike, which has yet to be approved by parliament.

Beqaj said tax increases on cigarettes would be take place over a number of years in phases until 2017 - until a point where the duties were close to the EU's minimal levy.

"We will continue to seek rigorous protection of the public's health from tobacco products," he added.

Duties on cigarettes will rise first by 2 lek (0.15 euro cent). This is the second hike in the duties on smoking since the centre-left government of Prime Minister Edi Rama took office last September.   

While the Minister of Health has promoted the issue, the increased tax take will bring some relief to the government, which is under pressure from the International Monetary Fund, IMF, to collect more money.

The IMF approved a loan of 334.4 million euro to Albania last autumn, intended to help the country put its finances into greater order after years of uncontrolled spending on expensive highway projects.

The loan is being disbursed in several tranches over three years and Tirana is being periodically reviewed by the Fund to see if it has met the financial targets in terms of collecting the amount of revenue stipulated in the loan agreement.