Dutch Lawmakers Proposes Lowering Excise Duties as Revenues Fall Short of Expectations

According to NL Times on December 3rd, Dutch MP Henk Vermeer has called for the repeal of the recently increased tobacco product consumption tax, as the actual revenue from this measure is lower than expected. 

Cancer organization KWF Kankerbestrijding strongly opposes this, emphasizing that the purpose of increasing tobacco consumption tax is not to increase treasury revenue, but to deter young people from smoking.

The excise duties on tobacco products have been significantly increased effective April 1st, with the tax on a 20-cigarette pack rising from 5.85 euros to 7.81 euros. The cost of buying a pack of cigarettes in the Netherlands has now exceeded 11 euros. 

However, the revenue performance after the tax hike has been disappointing. The Ministry of Finance has confirmed to the media that the latest data shows that this tax increase will result in a revenue decrease of approximately 5.5 billion euros from expectations. The sales of tobacco products in the Netherlands have significantly decreased, leading to a reduction in tobacco consumption tax revenue.

According to a study by RIVM, approximately 10% of smokers have quit smoking due to price increases. Researchers also noted that the percentage of cigarettes imported from abroad has risen from 24-28% to 35-39%.

"These figures substantiate what I already predicted. The only thing that is decreasing is the government's tax revenue. While the number of smokers is not demonstrably decreasing. You're stealing from the treasury if you do not reverse the excise increase," Vermeer said.

The coalition party suggests that individuals who cross the border to purchase cigarettes are likely doing their other shopping there as well. "That also means less revenue from VAT and corporate tax," Vermeer said.

KWF Kankerbestrijding strongly opposes the notion of reducing cigarette prices. According to director Caral van Gils, the excise increase wasn't intended to boost government revenue, but rather to prevent young people from taking up smoking. 

"Making cigarettes more expensive is very important and works. There is more than enough scientific evidence for that," she said.