Kosovo Raises Excise Duty on Tobacco by 70%

The U.N.-run southern Serbian province of Kosovo has raised the excise duty on tobacco imports by 70%, effective March 1, in a bid to raise budget revenue, Kosovo's economy and finance ministry said on Monday.

"The increase of excise on tobacco is intended to: harmonize the level of excise with countries in the region and increase of the budgetary incomes," the ministry said in a statement.

The new excise duty is 17 euro ($22.4) per kilogramme. The previous duty, in force since October 2003, was 10 euro per kilogramme.

"This increase will generate additional incomes near to 10 million euro," the ministry said.

Kosovo imported around 2.5 million tonnes of tobacco last year, earning around 26.5 million euro in excise duties levied on those imports.

Kosovo levies excise duties on imports of cigarettes, coffee, soft drinks and liquor, wine, beer, oil and automobiles. Kosovo expects to collect 187.5 million euro in excise duties in 2005.

Kosovo, a Serbian province of two million people, is legally part of the loose union of Serbia and Montenegro, which succeeded rump Yugoslavia in 2003. The province was put under United Nations administration after NATO bombed Serbia in 1999 to halt the Serb repression of the ethnic Albanian majority in Kosovo.