Price of Cigarettes

11/01/2016 09:36

The Consumer Council of Fiji advises all smoke-lovers not to expect any further reduction in the price of cigarettes as the present retail price is inclusive of revised VAT rate.

This advice is given because the Council has been receiving calls from consumers who feel the current cigarette price is not reduced by 6% as a result of VAT reduction that came into effect on 1 January 2016.

Amidst growing confusion among the consumers over the price transition in the marketplace, the Council would like to clarify that the current retail price of the cigarette accounts for increase in excise tax (12.5%), the addition of the health levy (6%) on tobacco products and the reduction of VAT by 6 per cent.

This revised retail price had come into effect on 9 November 2015. And, this is the reason why there was no further price change from 1 January 2016 as the VAT reduction had already been factored into the price change from 9 November 2015.

The retail price of the locally produced cigarettes is set/recommended by British, American Tobacco Fiji (BAT) in the Fijian market and all retail outlets were notified of the price change of the cigarettes on 9 November 2015.

It is worth noting that BAT was bearing the cost of the VAT difference from 9 November 2015 to 31 December 2015.  It is understood that this move was made to avoid change of prices twice within a two month- period, to allow smooth transition to the new pricing.

Consumers should also be mindful that cigarette is not a price controlled item, therefore, some retailers may be selling the product at a higher price.

The Council reiterates that consumers should indulge in comparative shopping to get the best retail price for their cigarettes. Both, the consumers and the retailers are urged to contact the Fiji Revenue & Customs Authority or BAT for clarity on the price issue.