Tobacco was introduced to Ottomans in 1601-1605 by British, Venetian and Spanish traders via Istanbul, which means tobacco began to be used in the Ottoman Empire one hundred years after it began to be used in Europe
No prohibition was legislated against tobacco until 1633 although the government collected customs tax. As consumption increased, ideas for and against tobacco started to be spoken about in other countries. Theologists announced that smoking was against the Quran. Sultan Ahmet the first declared the ban against smoking tobacco.
Smoking tobacco with long pipes is a very old Indian tradition.
Murad the fourth is most known for his combat against tobacco, now known as the cigarette.
It is unknown when exactly tobacco production started in the Ottoman Empire. The first tobacco seeds were brought in by Rumelian traders from Europe and planted in Macedonia, Yenice and Kırcali
Tobacco was imported freely until 1678. Later in the times of II. Süleyman, 8 through 10 coins were charged as customs tax on the tobacco produced in Yenice and Kırcali and brought to İstanbul. The amount of tax was increased later and charged from both dealers and buyers. It was decided that dealers pay 12 coins while buyers pay 8 coins.
In 1686, the tax charged from tobacco dealers increased to 16 coins under the name of “duhan/duhan tax”. Later in 1698, taxing was contracted for 55 mass coins.
Tobacco production was quite popular since it was done freely. Tobacco agriculture also started in Anatolia. Large firms were devoted to tobacco production in Anatolia and Thrace. A code was legislated to regulate tobacco production and draw income from it. Taxes were charged from tobacco producers, dealers and buyers according to tobacco types. Customs tax was increased to 20-50 coins per oke (1283 gr.). According to the code, tobacco producers had to pay 2,5 kurus 12 paras for each acre as “duhanı acre tax”.
Mahmut the second, an innovative sultan, increased the taxes on tobacco by one hundred percent in order to cover the expenses of the newly established military department. In 1826, the income of duhanı acre tax was increased from 3000 purses to 6000 purses, i.e. 3 million kurus. A trade contract was signed with the neighboring countries for the taxes on import and export of tobacco in 1840. During this same year, a Monopoly Office was established.
The most important developments occurred in 1861 when tobacco import was banned. Monopoly governance of tobacco was revised with a code in 1862 and previous practices were abandoned. According to the new code, taxes were charged depending on the quality of tobacco. It was also abandoned later and taxes were charged irrespective of the quality of tobacco.
Various regulations and changes took place until 1872. In 1872, the first governmental monopoly was established and taxes were charged in production zone. The right to run the monopoly was granted to two Greek bankers for 3500 pieces of gold but six months later it was cancelled. New regulations were made in 1873 and a new organization called “İdari İnhisariye Duhan” was founded. In 1874, factories were built to produce cigarettes and packed tobacco production was still being done freely and sale prices were registered. With a contract signed in 1883, the right to run tobacco monopolies was granted to a French company titled “Memaliki Osmaniye duhanları Müşterekilmenfaa Reji Company”. The company conducted business until 13 June 1921. After a contract was signed between the company and the government, Reji was transferred to the government.
In the first economic congress in 1923 the decision was made that Reji Company be closed. With the code Number 558 dated 26 February 1923, the government took the charge of buying tobacco for domestic consumption, treating it, producing and selling tobacco, and running all works to do with tobacco. In accordance with this code, all monopolies became governmental monopolies. In 1923, cigarette factories were established in Turkey. Governmental concessions were extended on 26 February 1923. The government took the control of such deeds as importing and domestically selling cigarette, leaf, minced tobacco, snuff and pipe. It was the beginning of a governmental monopoly which would last years