The "Excise Calendar" continues: higher excise duties on cigarettes until 2029 and pressure on smokers

Bulgaria continues to follow the schedule for the gradual increase of excise duties on tobacco products according to the already introduced "excise calendar", which actually started with the amendments from 2023 and was accelerated from January 1 and May 1, 2025. The aim of the multi-stage reform is to increase the minimum excise duty on cigarettes from approximately BGN 180–200 per 1000 pieces to about BGN 258 by 2029, in parallel with the increase in excise duties on smoking tobacco and heated products.

What is the "excise calendar"

Specific steps by year are written in the law: the specific excise duty on cigarettes increases in several stages – for example, from about BGN 120 per 1000 pieces in 2023, to about BGN 130–135 in 2025 and to over BGN 140 from January 1, 2026, while the minimum total excise duty (specific plus ad valorem component) per 1000 cigarettes is also updated. For smoking tobacco, the rates also increase every year, reaching over BGN 200 per kilogram by 2026, and for heated products – about BGN 400/kg, with the prospect of approaching BGN 500/kg by 2029.

The model is chosen in such a way as to avoid sudden "shock" price increases – instead of a one-time large jump, excise duties are increased by a few percent or tens of stotinki per pack per year. This gives relative predictability for businesses in planning prices and availability and gives consumers time to decide whether they will reduce or stop consumption.

Health and fiscal motives

The health argument is that a higher price is one of the strongest factors for quitting smoking, especially among young people and low-income groups. With each new step of the "excise calendar", the price of a standard pack of cigarettes increases by tens of stotinki, and for the period 2025–2026 the total increase can exceed BGN 1 compared to the levels of 2024. This turns smoking into a habit with an even more serious burden on the family budget and encourages some consumers to seek help to quit.

Fiscally, the phased increase in excise duty is expected to add hundreds of millions of leva annually to budget revenues from excise duties and VAT. In the context of rising healthcare and social policy costs, this is an important resource. At the same time, the authorities admit that excessively rapid price increases could encourage the gray sector and smuggling, which is why the schedule is spread over time until 2029.

Risk of gray sector and effect on consumers

Historical experience shows that with every larger jump in prices, the share of illegal cigarettes temporarily increases. Therefore, the current policy is trying to balance the speed of increase and the capacity of the state to control illegal trade. The control authorities are under pressure to keep the share of the illegal market in low single-digit values throughout the "excise calendar" period.

For smokers, especially those with lower incomes, the next few years will mean a continuous increase in the price of the habit – for a pack that cost about BGN 4–4.50 a few years ago, it is realistic to expect prices of BGN 6 and up towards the end of the period. This raises the question of whether some of the additional revenues will be directed to smoking cessation and prevention programs, so that the reform is not perceived solely as a fiscal instrument.