The Ministry of Finance plans to tax nicotine sachets with excise duty

“The proposed act on amendments to the Excise Duty Act is intended to cover two new categories of excise goods with excise duty, i.e. nicotine sachets and other nicotine products, as well as to extend taxation in the scope of innovative products already existing under the above-mentioned act, by amending definition of these products” – stated in the justification of the project posted on Monday on the website of the Government Legislation Center.

The Ministry of Finance proposes to exclude from taxation products used exclusively for medical purposes, such as chewing gum, patches and aerosols containing nicotine.

The Regulatory Impact Assessment explains that by changing the definition of innovative products, products that do not contain tobacco but contain nicotine will be subject to taxation.

According to the provisions included in the OSR, the excise tax rate on nicotine sachets and other nicotine products is to be PLN 100/kg in 2025, PLN 200/kg in 2026, and the target in 2027 – PLN 300 per kilogram.

The OSR also estimated that sales of nicotine sachets in 2025 would amount to 200 million. Assuming the weight of the sachet is 0.8 grams and applying an excise tax rate of PLN 100/kg, the revenues from this tax were estimated at PLN 16 million, and including VAT at PLN 19.7 million. In 2026, assuming 50%. increase in sales to 300 million pieces, using a rate of PLN 200/kg, excise tax revenues will reach approx. PLN 48 million (including VAT approx. PLN 59 million), and in 2027, with sales of 450 million sachets, with a rate of PLN 300 /kg, excise tax revenues would amount to approx. PLN 108 million (including VAT approx. PLN 133 million).

“The estimates do not take into account possible revenues to the state budget from excise duty related to the excise tax on innovative tobacco-free products (products containing plant raw materials, e.g. tea) and other nicotine products,” it added.

As indicated in the OSR, according to Eurostat data, the value of sales of nicotine sachets in the EU, from practically zero in 2015, reached EUR 796 million in 2022. Similarly, in the case of innovative products (tobacco for heaters) – the value of the EU market in 2015 was approximately EUR 13 million, and in 2022 it will reach approximately EUR 10.5 billion.