How Taxes and Policies Are Driving Up Cigarette Prices Across the Country

The final cost of a pack of cigarettes includes several components. Manufacturers typically receive about 15 percent to cover production and distribution. Retailers earn a regulated commission of around 8 to 10 percent. The largest portion, roughly 75 to 80 percent, consists of government taxes, including excise duties and value-added tax (VAT). Excise duties combine a percentage of the retail price with a fixed rate based on quantity, and minimum thresholds are applied to maintain consistent revenue for public health programs.