European Commission proposes new draft law EU-wide tax on e-cigarettes

The EU will have an EU-wide tax policy for E-cigarettes suggest – a long-awaited step. According to this draft from the European Commission, the new rules would also double excise taxes in member states with lower tobacco taxes.

The draft provides, that products with high nicotine content are subject to an excise tax of at least 40 % be occupied, while e-cigarettes with lower nicotine content face a tax of 20 % should be documented. A customs duty of 55 % be collected.

The changes to the legislation will increase the EU minimum excise duty on a box of 20 Cigarettes from 1,80 € up 3,60 € raised, which will increase the price of cigarettes in Eastern European countries, where a box currently costs less than 3 € can be sold.

The lack of an EU-wide excise tax framework on e-cigarettes and heated tobacco products undermines tobacco control efforts across the EU”, I know Alberto Allemanno, Professor of EU law at the Ecole Supérieure de Commerce in Paris, told the Financial Times.

Also in countries like Austria and Luxembourg, where cigarette prices are low relative to income, Excise taxes on cigarettes are expected to rise significantly. The cigarette tax increase is expected to generate additional revenue for EU member states 9,3 billions of euros.

In addition, the European Commission this month banned the sale of flavored, heated tobacco products, to curb the increasing demand for these products among younger consumers. The FDA has started this in the USA, Ban popular flavored e-cigarette products like Juul.

Peter van der Mark, Secretary General of the European Smoking Tobacco Association, an industrial group, warned, that “a sudden and dramatic increase in the quantity of tobacco could create a market for illicit trade”. Dustin Dahlman, President of the European Independent E-Cigarette Alliance, added, that taxing new tobacco products could lead to this, that “much less harmful alternatives to smoking (E-cigarettes) are excessively taxed in many countries”.

The proposal must be accepted by all EU member states, before it can become law. British American Tobacco, one of the largest cigarette manufacturers in the world, emphasized, this is “the beginning of a long legislative process”.