Key Points:
·The EU is considering raising taxes on certain tobacco products to 258%.
·This move could bring in approximately 15.1 billion euros ($17.5 billion ) in additional tax revenue for the EU.
·The plan also includes taxing e-cigarettes.
According to a leaked internal impact assessment document obtained by the European edition of "Politician" magazine on the 13th, the European Commission plans to increase the tax rate on hand-rolled cigarettes by 258%, while regular cigarettes will see a 139% hike.
A report has indicated that the European Commission has proposed three tax reform plans, with a preference for implementing the plan with the highest tax rates in order to increase tax revenues by approximately €151 billion ($175 billion). If this plan is implemented, the tax rate for cigarettes will increase from €90 ($104) per 1000 cigarettes to €215 ($249), and the tax rate for hand-rolled tobacco will increase from €60 ($69) per kilogram to €215 ($249). Additionally, the tax rate for cigar products known as "leaf-rolled tobacco" will steeply rise from €12 ($14) per kilogram to €143 ($166), a 1092% increase.
The tax reform plan also involves e-cigarettes, with a tax of €0.36 (USD 0.42) per milliliter imposed on e-liquid with a nicotine concentration exceeding 15 milligrams per milliliter, and a tax of €0.12 ($0.14) per milliliter on products with concentrations below this standard.
The European Commission emphasized in a document that raising tobacco taxes and prices has long been proven to be the most effective measure in reducing overall tobacco consumption. The current minimum tax rate has not been effective in reducing tobacco consumption. In the past decade, a decrease in tobacco consumption of approximately 40% has been attributed to tax policies.
In addition, the European Commission has faced pressure from member states to amend the Tobacco Excise Directive (TED) due to the increasing use of new tobacco products such as e-cigarettes, especially among young people and adolescents. The TED, established in 2011, sets the minimum tobacco tax rates, which member states use as a basis to determine their own tax rates.
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