how they are established and when they come into force

JD
Updated: 05/03/2022 12:30 a.m.
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Last Saturday, the Official State Gazette published the new
tobacco sales prices
in Spain. These rates are regulated by a 1998 law, the 1998 Tobacco Market and Tax Regulation Law, which since its publication has registered amendments and nuances, especially in the health field.

Thus, the sale price of tobacco is made up of two components: the one set by the manufacturer and the part referring to taxes, which differs depending on the type of product (cigarettes, cigarettes, etc.).

What the law says about the manufacturer and price changes

The aforementioned Law for the Regulation of the Tobacco Market and Tax Regulations establishes, in its article 4 (relating to retail trade) that "the prices for sale to the public of the different types, brands and types of tobacco destined to be marketed in Spain, with the exception of the Canary Islands, will be determined by the manufacturers or, where appropriate, their representatives or agents in the European Union.

That is, it is the manufacturer himself who sets the price of the product.

Next, that price, and subsequent changes that arise, must be communicated to the Commissioner for the Tobacco Market. The law states that these prices must be presented "through any of the means provided for in article 16.4 of Law 39/2015, of October 1, on the Common Administrative Procedure of Public Administrations." These means are electronic administrations, post offices or those collected by the current administration.


[Así quedan los nuevos precios de las marcas de tabaco en España tras su publicación en el BOE]

This regulation explains why
last price change
of tobacco, for example, only certain brands have changed (in this case, Lucky or Marlboro), since what has changed is the price established by the manufacturer of those specific brands. A circumstance that the BOE itself collects, which indicates that the prices "have been proposed by the corresponding manufacturers and importers."

Therefore, the answer to the question how often tobacco prices change and when they come into effect is every time the manufacturer changes the price and communicates it as established by the Tobacco Market Regulation Law. Although it can also change if there is a tax alteration of a specific product -not a brand-.

Tobacco and taxes: how much is paid

The different tax rates on tobacco are listed on the Spanish Government Administration portal. Thus, the Special Tax on tobacco products establishes that on cigarettes it is 51%, with a specific rate of 0.49 euros per pack. Regarding cigars and little cigarillos, it is 15.8%, 41.5% for rolling tobacco and 28.4% for tobacco from other tasks.

The BOE indicates that the latest price changes "have been proposed by the corresponding manufacturers and importers"

However, the final tax burden for the sum of other taxes is higher. According to the 2020 report of the Tobacco Table (association of farmers and merchants of this product), tobacco products "bear the highest tax burden of all consumer goods, equivalent to 77% of the PVP, ahead of hydrocarbons, alcoholic beverages and electricity'. This means that tobacco contributes, according to the same source, "32% of income from Special Taxes, 3% of VAT collection and 0.2% of social contributions." The 2020 Tobacco Table report estimated the contribution to the State's tax collection at more than 9,000 million euros.

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