Starting January 1, 2026, the excise tax rate on imported cigarettes will increase by 85 tetri per pack, reaching 2.75 GEL. This is outlined in a draft law initiated by Georgian Dream MPs Shota Berekashvili, Giorgi Barvenashvili, Levan Machavariani, and Tornike Berekashvili. Under the same draft law, the excise tax rate on locally produced cigarettes, which is currently equal to that of imported cigarettes at 1.9 GEL, will be set at 1.3 GEL.
In addition, according to the bill, a tax relief will apply to the first 35 million packs of locally produced tobacco products, after which the standard rate will take effect. The ad valorem component of the excise tax on local production is also reduced—from 30% of the retail price to 15%.
“The aim of the draft law is to protect local production and increase competitiveness in the sector. To achieve this, it is necessary to reduce the excise tax rate on locally produced cigarettes (the types of tobacco products indicated under code 2402 20, up to 35 million packs annually). In addition, to achieve fiscal and public policy objectives, it is important to amend the excise tax rate on both locally produced cigarettes exceeding 35 million packs per year and imported cigarettes.
Reducing the excise tax rate on locally produced cigarettes (code 2402 20, up to 35 million packs per year) will significantly affect both the market structure and the competitive environment. As a result, a healthy competitive environment will emerge, and the share of local production on the market will increase. This will create favorable conditions both for strengthening economic activity and stabilizing budget revenues. Moreover, adjusting the excise tax on locally produced cigarettes exceeding 35 million packs per year and imported cigarettes is expected to support fiscal and public policy goals within the excise tax framework.
Locally produced cigarettes listed under code 2402 20, containing tobacco, up to 35 million packs per year will be taxed at an excise rate of 1.3 GEL per 20 cigarettes. Locally produced cigarettes exceeding 35 million packs per year, as well as imported cigarettes, will be taxed at 2.75 GEL per 20 cigarettes.
For locally produced filter and non-filter cigarettes listed under code 2402 20, containing tobacco, up to 35 million packs per year, the excise tax rate per 20 cigarettes will equal the excise rate defined in Article 188, Paragraph 1, plus 15% of the retail selling price. For locally produced filter and non-filter cigarettes exceeding 35 million packs per year, the excise tax rate per 20 cigarettes will equal the excise rate defined in Article 188, Paragraph 1, plus 20% of the retail selling price,” the explanatory note to the draft law states.
