
The European Union (EU) is reportedly considering raising cigarette taxes by up to 258%.
According to the impact assessment report obtained by Politico Europe on the 12th, the EU Commission is considering tax increases of up to 139% and 258% on cigarettes and rolled cigarettes, respectively.
If the plan is passed, the tax per 1,000 cigarettes will rise from 90 euros to 215 euros, and rolled cigarettes will rise from 60 euros to 215 euros per kg.
Tax standards are also introduced for e-cigarettes according to nicotine concentration.
Liquid products with nicotine concentrations exceeding 15mg are subject to a tax of 0.36 euros per ml and 0.12 euros per ml for products below that.
The Commission expects to secure an additional 15.1 billion euros in annual tax revenue if the highest level of increase is adopted.
The Commission stressed that raising tobacco taxes is the most effective means of reducing overall tobacco consumption, noting that the current minimum tax rate no longer has a real impact on reducing tobacco consumption.
According to the report, about 40% of the decline in smoking in the EU over the past decade has been attributed to tax policies.
Previously, the Commission has been under pressure from member states to include new products such as e-cigarettes in amendments to the Tobacco Consumption Tax Guidelines (TED).
As the use of new tobacco products by adolescents and young people has increased, TED amendments enacted in 2011 are needed.
TED is a guideline that sets the minimum tobacco consumption tax rate, and member states set national tax rates based on TED.
Sixteen member states, mainly the Netherlands, sent a letter to the Commission last year, calling for a revision of the guidelines, pointing out that differences in tax rates by member states are distorting the single market, and that new products such as e-cigarettes are especially prevalent among youth and young people.
On the other hand, some countries, including Italy, Greece, and Romania, are concerned about the side effects of excessive increases on consumers and markets and need a more cautious approach.
The Commission is expected to release a draft TED amendment this summer.
EJ SONG
US ASIA JOURNAL