Impact of price and excise tax increase on consumption and government budget
| Scenario | Conditional price elasticity | Unconditional price elasticity | ||
| Cigarettes consumption | Total government revenue | Cigarettes consumption | Total government revenue | |
| I* | −7.00% | 8.00% | −7.66% | 6.92% |
| II† | −14.00% | 12.35% | −16.93% | 8.35% |
Baseline assumptions: cigarette consumption 1 000 000; conditional price and income elasticity −0.62 and 0.232; unconditional price and income elasticity −0.80 and 0.63; GDP growth rate 3.5%; specific excise €0.6 per pack, ad valorem 32%, VAT 21% (2018); retail price 2.1 (WAPC 2018).
*Specific excise increases from €0.6 to €0.8, ad-valorem excise taxes increase by 2%.
†Specific excise increases from €0.8 to €1, ad-valorem excise taxes increase by 2%.
WAPC, weighted average price of cigarettes.