The European Commission has announced that the proposed revised Tobacco Excise Directive will be made public at the beginning of the fourth quarter of 2022 during a digital consultation session held on 18 May, with the participation of Commission officials and other interested parties such as retailers, associations, representatives of scientific and medical associations as well as representatives of the tobacco industry.
The Commission pointed out that tobacco taxation is outdated as it has not been revised since 2010 and does not take into account the evolution of the tobacco market nor the inflation rates of the last decade.
According to sources, the revised directive will address three main issues: tax increases on all traditional tobacco products, harmonization of new tobacco products such as e-cigarettes, heated tobacco products and nicotine pouches, and fight against the illicit trade and manufacture of tobacco products.
The Commission referred to the results of the extensive public consultation, comprising elements of 7300 contributions from the 27 EU members as well as other third countries, where governments, organizations and citizens highlighted the need to harmonize new products, but not to tax them at the same level as traditional cigarettes. In its referral, the Commission mentioned that all the above factors had been taken into account.
It should also be mentioned that the results of the consultation showed a substantial degree of consensus among all categories of stakeholders on the need to include new tobacco products that have recently appeared on the market in the harmonized EU framework in excise, to develop standard definitions and to remove obstacles to the single market.
The prevailing view among all categories of stakeholders was that an EU minimum tax for heated tobacco products should be set at a lower level than fine-cut tobacco and that e-cigarettes should be taxed at the same levels. lower rates offered (€0.10 per ml) or according to the consumers themselves at a zero minimum rate.
Apparently, attendees of the May 18 stakeholder event commented on the issues raised in the same way as in a public consultation in 2020. Specifically, NGOs supported the need to tax all products equally, but representatives from industry and academia disagreed and instead supported measures to tax according to their risk profile.
Although the Commission did not mention any details during this meeting, it did mention that this directive is a matter of public health and the internal market. It is therefore safe to assume that the proposal will include significant ‘upward convergence’ of all tobacco products, as described in the EU Cancer Plan, which is also the main driver of the Directive.
It remains to be seen how each of the members of the European Union will react to the proposal in the current economic and fiscal environment and also whether they will take into account the results of the consultation of European residents.
The full othe official report on the results of the open public consultation can be read here