Montenegro has made remarkable progress in regulating the tobacco market and increasing revenue from this sector during 2024, with a notable rise in cigarette sales, smokeless tobacco products and excise tax revenue, according to the Ministry of Finance.
The statement emphasizes that the country’s comprehensive fight against illegal trade, combined with strategic measures by the Government of Montenegro, has led to strong growth in the legal market.
In September of last year, the Government decided to revoke the approval for establishing the “New Tobacco Factory” free zone, and earlier, in July 2021, it banned the storage of tobacco products in the Bar Port Free Zone. Over the past five years, Montenegro has made exceptional progress in the tobacco market, with the gray market reduced to about 20%, a significant drop compared to previous years, primarily due to the much smaller scale of illegal tobacco trade, the statement reads.
The Ministry of Finance points out that with the new excise tax calendar, which came into effect on January 1, 2025, Montenegro has positioned itself as a leader in the region regarding tobacco market regulation and control.
Regarding the cigarette market, compared to 2020, sales in 2024 increased by 102% or approximately 617 tons of cigarettes, while compared to 2023, sales were higher by around 94 tons, or 8.5%. There has also been notable expansion in smokeless tobacco products. In comparison to 2021, 2024 saw a 174% increase in sales or more than 5 million packs of smokeless tobacco products, while compared to 2023, sales were up by about 24% or over 1.5 million packs, the Ministry of Finance clarified.
Meanwhile, excise revenue from tobacco products surged by an impressive 162% in 2024 compared to 2020.
In 2024, the excise revenue reached €119.15 million, a substantial increase from €45.56 million just four years earlier. This remarkable growth is the result of gradual increases in excise rates and measures against illegal activity, leading to improved efficiency in tax collection. Official data shows that 2024 was a record year across all parameters, demonstrating the Government’s commitment to combating the shadow economy and strengthening the legal market. The new excise calendar and continued focus on this area suggest that the tobacco market will be even more regulated in 2025, with further revenue growth expected, the Ministry concluded in its statement.
