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Tax Gap of Heated Tobacco Products in Colombia
In Colombia, Law 1819/2019 established the taxation of heated tobacco products with a mixed excise system similar to that of cigarettes, which includes a specific tax and an ad valorem component that acts as a heath tax surcharge (“consumption surcharge”) of 10% of the “certified price” for each brand. The certified price for the ad valorem component is updated every year and published by the National Department of Statistics (DANE). The specific component is based on the number of sticks and is updated annually to account for inflation, plus 4 percentage points.
For the year 2023, the specific tax component is COP 3.263 per pack of 20 sticks (both for cigarettes and HTPs); the annual average certified price was COP 7.549 for 20 heated sticks (HEETS Amber brand), and the average annual certified price for Marlboro Red was COP 8.642 per pack.
The increase in the tax rate for the consumption of cigarettes and tobacco for 2023 was regulated by the General Directorate of Fiscal Support of the Ministry of Finance through Certification 004 of December 6th, 2022. In its press release of December 5th, 2022, Dane certified that in November 2022 the annual variation of the Consumer Price Index was 12.53%.
Sources:
- Departmento Administravo Nacional de Estadística (DANE) Annual price certifications for 2023
- Ministry of Finance and Public Credit, Certification 004 of December 6, 2022
- Excise tax on cigarettes and tobacco by 2023
Last updated Sept. 1, 2023