The EU is looking to increase cigarette excise tax and introduce a new tax on vapes and heated tobacco.
A draft European Commission document revealed that the European Union (EU) may be imposing double excise taxes in member states with low cigarette taxes as well as, for the first time, a bloc-wide vape tax.
According to Financial Times, EU’s minimum excise duty on cigarettes will increase from €1.80 to €3.60 per pack of 20. The increased excise tax would raise prices in eastern European nations where packs can sell for under €3.
Stronger vaping items would be subject to an excise charge of at least 40%, while lower-strength vapes would be subject to a 20% tax. Additionally, heated tobacco products (HTP) will be subject to a 55% tariff, or a tax rate of €91 per 1,000 units sold. Flavored HTP is now banned in the EU.
The cigarette excise tax hike is anticipated to bring in an additional €9.3 billion for EU member states. However, Peter van der Mark, secretary-general of the European Smoking Tobacco Association, warned that “if you have a sudden very steep increase, you can create a market for illicit trade.”
The taxes are part of the EU’s Beating Cancer Plan, with public health officials aiming to lower tobacco use among EU citizens from the current 25% to 20% in 2025 and lower than 5% by 2040. This is part of the EU’s push for a “tobacco-free generation” by 2040.
The proposal will still have to be agreed on by all EU member states before it becomes law.