Article by Luca Pons – Fanpage.it journalist
Now the European Commission’s proposals to increase taxes on cigarettes and other tobacco products are official, written black on white. The Commission announced them yesterday, along with measures for the next European budget.These are initiatives that will now be discussed at length, may change even radically, and in any case will not come into force before 2028. But they are nonetheless the starting point for negotiations. As for tobacco, the tax hike could – according to manufacturers’ estimates – bring an increase of more than one euro per pack for cigarettes.
There are two proposals, separate though related. The first is a reform of the directive regulating tobacco taxes, which dates back to 2010. This is the proposal that most directly affects smokers, because it would raise minimum excise taxes on cigarettes, tobacco, electronic cigarettes, and so on. The second, on the other hand, concerns public budgets: it would oblige EU states to pay directly to the European Union a portion of the taxes they collect from the sale of cigarettes.
Excise tax increases on cigarettes and tobacco, by how much they go up and since when
The first measure, the increase in excise taxes on cigarettes and tobacco products, would take effect from 2028, and the first four years would be an ‘adjustment’ period for member states. Already, the European Union decides the minimum level of excise taxes that each country must charge on cigarettes and other similar products, but the amounts were decided in 2010 and are now very low, far from reality. So, it is necessary to raise them.
Not only that, but they also need to be expanded. Compared to fifteen years ago, many new products have emerged in addition to cigarettes and shredded tobacco: the various forms of electronic cigarettes, above all, but also so-called nicotine pouches. EU minimum excise taxes currently do not apply to these products, nor to raw tobacco. Therefore, each state can tax them as it sees fit. With the reform, however, they would be included and there would be equal base levels for all.
The Commission’s estimate is that with the tobacco industry’s proposed increases would come, across Europe, fifteen billion euros in extra taxes each year. As for the figures, the idea is that the minimum excise taxes could be different for each country, depending on its economic situation; but in the official text there is an indication of the minimum level to be respected:
– 215 euros per thousand cigarettes, instead of 64 euros per thousand cigarettes as is the case today
– 143 euros per thousand cigars or cigarillos, instead of the current 12 euros
– 215 euros per kilo of shredded tobacco, instead of the current 40 euros
– 108 euros per thousand heated tobacco cigarettes (today there is no minimum excise tax for these products)
– 143 euros per kilo for other tobacco products
– 12 cents per milliliter for electronic cigarette liquid, if there is a maximum of 15 mg of nicotine in each milliliter; 36 cents per milliliter, if this amount of nicotine is exceeded
These are significant increases, even though as mentioned the current minimums were decided in 2010, and for current prices they are very low. So much so, the Commission points out, that on average in all European states excise taxes on tobacco products are already more than double the EU minimum.
As for the effect on the price paid by smokers, the impact will also depend on the choices of states and manufacturers. The estimate made so far, as mentioned, is that for a pack of cigarettes the price may rise by more than one euro.