Smokers across the EU may be in for a surprise later this year if the European Commission adopts experts’ proposals to double the tax on cigarettes to curb the addictive habit.
Experts, including top economists and health specialists, are recommending that the minimum excise duty on cigarettes and other tobacco products across the EU be “at least doubled” and increased every year.
They have established a clear relation between the price of cigarettes and consumption patterns through a three-year Commission-sponsored study on pricing policies and control of tobacco products in Europe.
The study concludes that the higher the cost of cigarettes the lower the consumption.
Unveiling their recommendations to the Commission in Brussels, the experts urged a radical increase in the taxation of all tobacco products as the most effective way to make them inaccessible to European consumers.
They also recommended a full alignment of tax rates and taxing roll-your-own tobacco at the same rate as manufactured cigarettes because the recession had led many smokers to switch to this cheaper product.
The coordinator of the consortium that ran the study, Luke Clancy, said that EU governments should “double the minimum monetary tax level on cigarettes” and then “increase it each year above the cost of living rate”.
Although excise duties on tobacco products vary across the EU, there are minimum thresholds in place which all member states adhere to.
Though, currently, excise duty on a packet of 20 cigarettes is calculated according to its retail price, Maltese smokers are paying about €2.55 in taxes on an average packet of cigarettes selling at €4.20.
While this may sound high, Maltese smokers are still not paying as much as their European counterparts.
Sources close to EU Health Commissioner John Dalli, under whose umbrella the revision of the tobacco products directive falls, yesterday made it clear that “no decision has yet been taken on this issue even though the recommendations make sense”.
According to the sources, “the minimum excise duties have been set a long time ago and are one of the elements in the directive that is being looked into”.
However, the sources emphasised “there is no decision yet on any aspect of the revision of the directive”.
While health experts are requesting tough rules, the multimillion tobacco industry is lobbying with the Commission to safeguard the “status quo” and influence its decisions.
In the eventuality that the Commission proposes a revision to the taxation structure of tobacco products, these measures will have to be agreed upon by all member states to be implemented.