Acta Univ. Agric. Silvic. Mendelianae Brun. 2010, 58, 93-102
Published online 2014-07-17

Assessment of impact of tax rates changes on cigarette prices in the Czech Republic

Petr David1, Luboš Střelec2, Pavel Kolman2

1Ústav účetnictví a daní, Mendelova univerzita v Brně, Zemědělská 1, 613 00 Brno, Česká republika
2Ústav statistiky a operačního výzkumu, Mendelova univerzita v Brně, Zemědělská 1, 613 00 Brno, Česká republika

The consumption taxes called excise duties are imposed on tobacco products in the Czech Republic and also in the other European Union countries. Cigarette taxation is atypical compared to taxation of other products encumbered with excise duty. Number of cigarettes and also consumer’s price together make the tax base. Harmonization effort of cigarette taxes in the European Union countries and also pure fiscal need of Czech Republic, are causes of frequent changes of cigarette taxes rates in recent years. These changes does not conduce only to changes of tax collection, but also bring many other effects, that have to be identified and analysed to set global results of steps to be made in the scope of tax policy in the Czech Republic. Average price of all 435 cigarettes marks on the market in the period from July 2001 to July 2009 is the base characteristic necessary to examine impacts of cigarette taxes changes. Classical regression analysis is used to analyse legislative changes impact on average cigarettes price. Single legislative changes are realized through the use of synthetic (dummy) variables performing as explanatory variables. There is also tested significance of particular parameters of the model and analysed structural breakages in this text. It is necessary not only to impeach lawful impact of these steps during imposing or changing of taxation, but also effective impact, which is often very different from lawful impact. From implementation of obligatory of marking the cigarettes in 2001 we are able to identify some relevant characteristics and impacts of changes of tax burden imposed on cigarettes in the Czech Republic. Statistically significant changes of average non-weighted price of cigarettes are identified in here, as well as structural breakages of average non-weighted price of cigarettes and values of tax incidence. Also temporal and other connection with given facts is discussed.


24 live references