Kurdistan Region to double tariffs on cigarette imports
"...we have decided to increases customs fees on cigarette imports by 100 percent and the decision will come into effect on February 14, 2019,” KRG Minister of Finance Rebaz Hamlan said in Decree No. 18974.
Commission taxes for a carton of cigarettes entering Kurdistan is 30,000 Iraqi dinars. In comparison, one carton of cigarettes entering Iraq from Kurdistan costs a commission tax of 90,000 Iraqi dinars.
The decision was made “because of the interests of the public, protecting local products, and unifying customs fees for cigarettes at federal and Kurdistan Region customs points, and in light of the decision made by the presidency of the Iraqi Council of Ministers (No. 389 of 2018)," detailed the decree.
According to the KRG, 23.4 percent of people in the Kurdistan Region are smokers. The international average is about 21 percent.
Smuggling of cigarettes and tobacco products is a major problem at border crossings.
Prices for packs of cigarettes in the Kurdistan Region vary based on their origin, freshness, and authenticity. They can vary from roughly 1,000 Iraqi dinars to 4,000 dinars.
It remains to be seen whether the tariff hike will result in additional smuggling and a larger black market for tobacco.
