Report

Finance ministry plans another excise tax hike on tobacco in 2021-2023

- Fiscal impact from excise tax hike expected at CZK 2bn in 2021, CZK 5.8bn in 2021-2023
- Tax treatment on meal vouchers to change as well, with a negative impact at CZK 0.1bn in 2021, CZK 10.1bn in 2021-2024
- Excise tax hike to lead to about a 3-4% hike of final cigarette prices, we project an upward impact on inflation at 0.14-0.18pps in 2021-2023
- We doubt excise tax hike will have a major impact on monetary policy, especially given demand shock due to Covid-19 crisis
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