Tobacco industry in Romania paid 20 billion lei to state budget in 2021, 13% more than in 2020

Four companies holding 95% of the legal tobacco market (BAT,JTI, PMI and Imperial Tobacco) paid over 19.85 billion lei to state budget in 2021, on the rise by 13% compared to 2020. The sum represents excises, VAT , taxes and contributions.   “In 2021, JTI Romania paid to the state budget over 14% more than in 2020. Despite restrictions imposed by the pandemic, we succeeded to increase contributions because the black market was below the European average, and regulations did not suffer major and unplanned changes. The state could count on this resilient sector in a time of unprecedented uncertainties,” said Gilda Lazar, the director of Corporate Affairs & Communications, JTI Romania, Moldova and Bulgaria.   Philip Morris Romania announces that over 2022-2023 it will invest over 100 million dollars. “Last year Philip Morris International investments in Romania reached about 100 million dollars. Since 2017 to the present day, 500 million dollars have been invested in our Otopeni factory. Over 2022-2023, PMI will invest over 100 million dollars and will continue to develop production capacities. In order to carry out what we intend we need medium and long term prospects for fiscal policies and a stable regulation frame from the authorities,” said Dragos Bucurenci, External Affairs manager, Philip Morris Romania.   About 75% of the price of a cigarette pack means taxes paid to the state, therefore fiscal policy predictability is essential for the tobacco sector.   “Even for less than 10% the prejudice to the black market budget reaches 2 billion lei. Therefore, this sector should be considered of strategic importance for Romania's economy and treated as such by the authorities,” said Adrian Pirau, market manager, Imperial Tobacco Distribution Romania.   At local level, the four companies – BAT, JTI, PMI and Imperial Tobacco – employ about 5,000 people, and have three factories in Romania.   In 2020, Romania became the second largest European cigarette manufacturer, after Poland , on equal grounds with Germany. In 2021 overall exports of tobacco products was over 1.34 billion euros, the positive contribution of tobacco to the payment balance being about 1 billion euros.   In order to continue the increase, including contributions to the state budget, manufacturers request that fiscal predictability be ensured, by adopting a new excise calendar.   In an optimistic scenario taken into account by ASPES, the tobacco sector might contribute to Romanian economy with 5.7 billion euros per year, which means 2.56% of GDP, in case no new restrictions are not introduced for the legal market the fiscal frame could be predictable, and illegal trade would be under 10%.