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Tax Gap of Heated Tobacco Products in Moldova
The Republic of Moldova amended the Tobacco Control Act to include new categories of tobacco products. The amendment was adopted on July 26th, 2019 (Law LP97/2019) and a new specific excise rate of for heated tobacco became effective on starting August 16th, 2019. Under the law, heated tobacco products are defined as “Aerosol of a tobacco product or a similar product/substance released as a result of using a device for heating a smokeless tobacco product or similar product that does not involve burning or smoldering process.”
Heated tobacco was initially taxed at MDL 610 per 1000 units of tobacco sticks, effective from August 16th, 2019. The amendment and Annex No. 1163 provide annual increases afterwards, and as of 2023, the tax on heated tobacco is MDL 1,103 per 1000 sticks.
Cigarettes are subject to a mixed excise system that includes an ad valorem tax based on the retail sale price, a specific tax and a minimum total excise based on sticks. As of 2023, the ad valorem rate is 13% of the retail sale price. The specific rates are increased annually to account for Consumer Price Index inflation. In 2023, the specific tax is MDL 822 per 1000 cigarettes (specific excise) and the minimum excise is MDL 1,103 per 1000 cigarettes.
Therefore, the excise rate on heated tobacco is effectively equal to the minimum excise on cigarettes.
Sources:
- Law No. 97 (July 26, 2019), Official Monitor No. 256-259, Article No. 350
- Annex No. 1163ru: Tobacco excise tax rates from 2021 to 2023
Last updated Sept. 1, 2023