The Cyprus Presidency of the Council of the European Union believes that negotiations between Member States on the revision of the directives governing tobacco taxation in the EU are gradually reaching a level of maturity allowing it to hope for a unanimous political agreement of Member States on Friday 12 June in Luxembourg (see EUROPE 13832/19).
After holding bilateral discussions with all the EU countries, it aims to submit a fifth and final compromise proposal to the national delegations on Wednesday 13 May, with a view to a political discussion at the level of the Member States’ ambassadors to the EU in late May.
Among the political issues to be resolved is the adjustment, for each Member State, of minimum tobacco tax rates in line with national purchasing power. Two-thirds of the increase in excise duties would therefore come from the increase in tax rates and one-third from the approach based on purchasing power parities (PPPs).
The Member State most affected by this approach would be Luxembourg, which enjoys a high standard of living but low taxes on tobacco products, a situation that attracts consumers from neighbouring countries.
Another stumbling block concerns minimum tax rates. For cigarettes, the Cyprus Presidency could plan to lower the rate to €180 per 1,000 cigarettes. Minimum rates would be periodically indexed to inflation.
Other issues to be resolved include snuff, which is legal only in Sweden but also circulates in neighbouring countries such as Finland, and contributions to the EMCS electronic system for monitoring and controlling the movement of products subject to excise duty.
Some countries believe that making tobacco growers contribute to the EMCS system would constitute an excessive administrative burden. (Original version in French by Mathieu Bion)