The delicate balance between excise duty policy and effective tax administration will present a key challenge for policymakers in the years ahead
The countries of the region have seen significant changes to their excise duty policies over previous decades. Driven by fiscal pressures and a desire to align with European Union standards, the authorities have increased excise tax rates steadily on a variety of products, such as cigarettes, petrol and alcohol. This has resulted in soaring average excise yields. However, this excise yield surge was not fully reflected in tax revenues in most Western Balkan countries, with the growth of illicit trade having played a significant role in eroding revenue potential.
As the Western Balkan countries continue on their path to EU accession, they will be required to further align their excise duties with minimum EU levels. This article, compiled with pieces from journalists in all countries of the region, addresses the nature of excise duty burdens across the region and the need to make improvements in areas like tax enforcement and anti-smuggling efforts.