Hungary to fund healthcare using increased tobacco excise tax revenue

The Hungarian government has announced that revenue generated from increasing tobacco excise taxes will be directed toward the healthcare system. This decision follows data indicating that more than 50 people die daily from tobacco-related illnesses, totaling approximately 20,000 to 25,000 deaths annually.

Officials noted that the cost of treating tobacco-related diseases is nearly double the revenue collected from tobacco excise taxes. In 2025, the direct and indirect healthcare costs associated with tobacco consumption were estimated at approximately 1,477 billion forints, representing 1.7 percent of the country's gross domestic product. In contrast, revenue from tobacco excise and VAT totaled roughly 775 billion forints last year.

The planned tax increases, scheduled for January, are expected to generate 90 billion forints in additional revenue to cover medical costs. The tax adjustments will be differentiated by product category: cigarettes will see a 9 percent excise tax increase, heated tobacco products a 25 percent increase, and fine-cut tobacco a 26 percent increase. Depending on how manufacturers pass costs to consumers, final retail prices are expected to rise by approximately 5 percent for cigarettes and 10 percent for heated tobacco products.