While EU rules on tobacco taxation work well in terms of predictability and stability of tax revenues, they are no longer effective in deterring consumption. This is one of the conclusions that emerged from the evaluation of the 2011 Directive on the structure and rates of excise duty applied to manufactured tobacco, published on Monday 10 February by the European Commission.
According to the Commission, the increase in the EU minimum rates for cigarettes and tobacco, as provided for in the Directive, has had an impact in only a few Member States, which initially had very low levels of taxation.
The high number of smokers in the EU remains a major concern, with 26% of the total EU adult population and 29% of young Europeans aged 15–24 smoking.
In particular, the report notes that the impact of taxation on deterring smoking among young people has been weaker than expected, in particular due to the substitution of cigarettes by cheaper products such as rolling tobacco.
Moreover, according to the Commission, the price differences which persist between Member States provide sufficient economic incentive for consumers to shop across borders unintentionally - the average price of a pack of cigarettes ranges from €2.57 to €11.37.
In its report, the Commission also concludes that the regulatory framework needs to be improved to meet new market challenges, such as electronic cigarettes. The current Directive does not cover these products and several Member States have established their own taxation systems.
It also highlights the need for a comprehensive approach to strengthen coherence with other EU policies. "There is a need to have a more comprehensive and holistic approach, taking on board all aspects of tobacco control including public health, taxation, the fight against illicit trade and environmental concerns", she writes.
See report: https://bit.ly/38gAtKL (Original version in French by Marion Fontana)