EC: Excises on tobacco have hardly affected rates of smoking

Written by on February 10, 2020 in Europe - Comments Off on EC: Excises on tobacco have hardly affected rates of smoking

The increase in EU minimum excise rates for cigarettes and fine-cut tobacco, set out in a 2011 directive, only had an impact in a few EU countries, which had very low levels of taxation in the first place.

This is said in a report released on February 10 by the European Commission, evaluating EU rules on the taxation of tobacco.

The 2011 directive requires EU countries to levy a minimum rate of excise duties on cigarettes.

This minimum rate must consist of a specific component of between 7.5 per cent and 76.5 per cent of the total tax burden (TTB) – expressed as a fixed amount per 1000 cigarettes, and an ad valorem component – expressed as a percentage of the maximum retail selling price.

The report highlights that while the current rules work well in terms of predictability and stability for EU countries’ fiscal revenue, “it is no longer as effective in deterring consumption”.

The high number of smokers in the EU is still a matter of significant concern with 26 per cent of the overall EU adult population, and 29 per cent of young Europeans aged 15-24, smoking, the European Commission said.

The launch of the Europe’s Beating Cancer Plan highlights the pivotal role of taxation in reducing tobacco consumption, in in deterring young people from smoking.

“In addition, price gaps between member states – the average price of a pack of cigarettes can range from 2.57 euro to 11.37 euro – represent a sufficient economic incentive for unintended high levels of cross border shopping.”

The evaluation also highlights that the emergence of new products, such as e-cigarettes, heated tobacco products and new addictive products reveal the limits of the current legal framework.

The evaluation finds that a more comprehensive approach, taking on board all aspects of tobacco control including public health, taxation, the fight against illicit trade and environmental concerns, is needed, the European Commission said.

(Photo: Rodrigo Matias/sxc.hu)

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