Kiosk owners in Cyprus have warned that proposed increases in tobacco tax could push consumers towards illegal markets, reduce legal retail sales and ultimately lower state revenues.
Andreas Theodoulou, president of the kiosks association (Sykade), said taxation is a legitimate public health tool but argued that Cyprus faces unique market conditions.
Theodoulou pointed to Cyprus’ divided status, saying the Green Line allows easier access to untaxed tobacco products from the occupied areas.
He said large tax increases affect both demand and where consumers choose to buy tobacco products, adding that the market is highly sensitive to price changes.
Existing level of illicit consumption
According to estimates from the association, around 13% of cigarette consumption and 53% of rolling tobacco consumption already comes from the occupied areas.
Further tobacco tax increases in Cyprus could expand this share and strengthen illegal trade channels.
Price rise forecasts
Industry representatives also warned that EU-level discussions on excise duty revisions for tobacco, including e-cigarettes and heated tobacco products, could significantly increase retail prices.
Sykade estimates that cigarette prices in Cyprus, currently around €4.50–€5 per pack, could rise to €8–€8.50 if the proposed changes are fully implemented.
The association said tobacco products play a key role for convenience stores and kiosks, warning that declining legal sales would have a wider impact on small businesses.
It also estimated that illicit tobacco already costs the state more than €50 million annually in lost revenue.
Calls for policy flexibility
Sykade has called on Cyprus to seek flexibility within the EU framework, citing the island’s division and enforcement challenges.
Its proposals include recognising the Green Line factor in tax policy, strengthening customs enforcement, imposing stricter penalties for smuggling and introducing a phased transition period of up to ten years for new tax rates.
Also read: Anti-drone system deployed at Central Prison after smuggling attempt
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