Why is the excise tax increasing after the elections? The Minister of Finance’s explanation

The changes in excise tax rates are linked solely to inflation adjustments, Finance Minister Vahe Hovhannisyan said at a briefing with journalists in the National Assembly, explaining why the increase is taking place shortly after the elections. According to him, the excise tax is being raised by 3 percent.

“A few years ago, we presented a plan for changes to excise taxes, which is set to expire on December 31, 2026. We must submit a new plan that will apply from January 1, 2027 onward. In other words, there cannot be a gap in such a framework,” the minister said.

At the same time, Hovhannisyan noted that excise taxes on some products are being reduced, for example in the case of fruit vodkas and brandy.

The government has already approved a legislative package revising excise tax rates on excisable goods. As a result, prices of cigarettes, alcohol, diesel fuel, and gasoline are expected to increase.

The proposal foresees annual increases in tobacco excise rates by 7 percent, heated tobacco products by 30 percent annually, electronic cigarettes by 100 percent in the first year followed by 25 and 20 percent in subsequent years, and hookah tobacco by 40 percent in the first year and 30 percent annually in the following two years.

The bill also proposes applying excise taxation to tobacco products classified under HS Code 2404 91 00, setting the rate at 2,800 drams in the first year, with a subsequent 30 percent annual increase over the next two years.