Croatia to Impose €0.20/ml Excise Tax on E-Cigarette Liquids Starting July 1

Croatia to Impose €0.20/ml Excise Tax on E-Cigarette Liquids Starting July 1

According to a report by LIDER on June 12, the Croatian government has announced its decision to impose an excise tax of €0.20 per milliliter on e-cigarette liquids, effective July 1. This move has triggered widespread concern and uncertainty among e-cigarette retailers and importers.

The new tax is part of a broader strategy by the government to bridge fiscal gaps by increasing excise duties on tobacco products for the second time in just over a year. For the first time, e-cigarettes—particularly e-liquids—are being explicitly included in the taxation framework.

On June 11, a draft regulation was submitted for public consultation outlining updated excise tax rates on cigarettes and other tobacco products. According to the proposal:

• The excise tax on traditional cigarettes and the minimum excise rate will both rise.

• The tax on heated tobacco products will increase from €185.82/kg to €198.50/kg.

• The tax on “new tobacco products” will go up from €114.15/kg to €120.50/kg.

• The previously zero-rated excise on e-liquids will be replaced with a €0.20/ml tax.

Industry Backlash and Business Impact

Industry stakeholders are warning of serious consequences. Filip Tokić, a board member at Dotmod, criticized the move, stating:

“Depending on how the tax is applied, retail prices could increase by 100% to 500%. A bottle of e-liquid that once sold for €10 may now cost €40. This will drive consumers away and devastate the market.”

Tokić also expressed concern over the lack of implementation guidelines from the Ministry of Finance. Retailers still have no clarity on:

• Whether the tax applies to existing inventory or only future stock

• How products must be labeled or marked

• Whether excise tax must be prepaid before sale

He warns that this level of regulatory uncertainty, paired with a steep tax hike, may push many vape businesses out of the market altogether.

Government Justification and Revenue Forecast

The Croatian government estimates that the updated excise framework could generate an additional €74.7 million annually in tax revenue. Tobacco excise duties are already a major pillar of the national budget, valued for their predictability due to stable consumer demand.

Officials argue that beyond fiscal benefits, higher tobacco taxes will have public health benefits, aligning with WHO international obligations to reduce smoking prevalence.

Critics Say Health Goals May Backfire

However, public health advocates and industry voices are skeptical. Tokić warns that rather than reducing smoking rates, the high cost of legally regulated products may push consumers toward black market alternatives, undermining both health goals and regulatory control.

He adds that Croatia has recently made progress in reducing smoking rates, but this new tax risks reversing those gains.

“More than 14,000 Croatians die each year from smoking-related illnesses. The state spends over €700 million annually on treatments for these conditions. A policy that revives tobacco use and creates an unregulated gray market will ultimately prove destructive.”

In summary, while the Croatian government frames the tax hike as a step toward better public health and fiscal stability, industry stakeholders argue that the policy may backfire—hurting small businesses, undermining harm-reduction progress, and expanding the illicit tobacco trade.

References：Trgovci e-cigaretama: Nove trošarine za većinu znače kraj poslovanja