PARLIAMENT yesterday approved a substantial hike in the price of tobacco with immediate effect, which is expected to bring state coffers additional annual revenue of €31 million.
The increase was officially announced on Thursday and the bill was rushed through parliament as a matter of urgency yesterday to prevent retailers stockpiling cigarettes and profiteering if the increases had come into effect on January 1.
Despite the immediate effect of the new tax, retail prices should remain the same until Monday when the law is published in the Government Gazette, and new batches go through customs.
A finance ministry official told the Cyprus Mail that consumers can report to the authorities any retailers selling at the new price before Monday.
According to what has been dubbed as the ‘health tax’ a packet of cigarettes is expected to go up by around 40 cents while rolling tobacco will see a hike of about €1.27 for a 50-gramme packet and €0.64 for a 25-gramme packet.
The finance ministry said the hike will increase its revenues from tobacco products to around €210 million.
The bill was approved by majority vote during a special plenary session.
Twenty-six MPs belonging to AKEL, DIKO and the Greens voted in favour of the hikes while five deputies belonging to EDEK and EVROKO voted against.
Main opposition DISY abstained.
DISY deputy chairman Averof Neophytou said his party would have more to say on the matter during the budget discussion next week but noted his relief for the urgent approval of the bill to prevent profiteering following the announcement of the hikes on Thursday.
Neophytou said the only way to put public finances right is to cut state spending and not increase taxes.
DIKO MP Nicolas Papadopoulos said his party did not vote for the bill as a way of increasing state revenues but as a measure of protecting public health.
He suggested that the additional revenue should be used to finance anti-smoking campaigns.
EDEK leader Yiannakis Omirou said the measure was aimed in increasing state income and reiterated that public finances could only be repaired through the increase in productivity and other ways and not taxes.
AKEL spokesman Stavros Evagorou said he did not think the bill helped protect public health but the effort to shore up the economy
