As from 1st January 2013, the Spanish Government is to raise taxes on cigarettes - BUT only on the cheaper brands! Seems bizarre.... The PP Parliamentary group in the Senate has introduced a minimum tax to apply to cigarettes, cigars and rolling tobacco. The tax increase will add an extra 18 cents onto the price of a pack of 20 cigarettes, but may end up somewhat higher.

Cigarette machines in most bars here

But this tax increase will only affect the cheaper brands priced at under 3.95 euro. Some of those that will be affected are Sovereign which currently sell at 3.70 euro, Sterling at 3.75 euro and Richmond at 3.90 euro - the likes of Silk Cut, Benson & Hedges and Marlboro should not be affected. However, looking at the UK prices for these brands they are still substantially cheaper. Sovereign retail at 6.76 GBP per pack which at todays exchange rate would make it ap 8.18 euro - so even with the increase it will still cost half the UK price. Benson & Hedges cost 4.50 euro a pack in Spain... in the UK they are 7.35 GBP which makes them ap 8.90 euro.

The Chancellor certainly knows how to tax doesn´t he..... and so its no surprise that Brits on holiday tend to take back the maximum allowance - and often even more, hoping not to be pulled over by customs as they arrive back home. However, a new craze that is still going strong is the "Flossy run" - though abit more popular over the summer months. Incase you are not "in the know", Flossy´s are deck shoes which come in a multitude of colours and are substantially cheaper here than in the UK... what isn´t!

Official outlet with "Tabacs" sign

But for those of you planning on buying cigarettes to take back ONLY buy them in registered tobacco outlets such as Eurotobaco or where you see the Browny/red "Tabacs"sign outside - there are numerous around. There are so many fakes being sold, especially in Benidorm. Only in the last week the Guradia Civil broke up an illegal counterfeit tobacco ring in Torrevieja and confiscated thousands of boxes of  fake cigarettes. These are often produced in China and have harmful ingredients... yes I know that tobacco is not exactly great for your heath but some of the things found in these fakes pose a serious health hazard.

So is this a plan to reduce smoking or a tax raising measure for the Spanish government I wonder. Remember, on 1st September they increased the IVA rate to 21% making it 1% higher than VAT in the UK. The recent state budget for 2013 proposed 600 amendments and the opposing PSOE party criticized many of them stating that "In a recession you cannot raise taxes and cut spending because it only leads to social marginalization"  - I bet that was an interesting meeting! Some of the proposals put forward by the opposition parties where a 20% reduction to funding for the Royal family, 35% reduction to the Church and adjustments to the pensions for government employed workers.

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