Taxes Will Double the Price of E-Cigarettes in the EU

March 3, 2016 Taxation in EU

BRUSSELS – Tax changes could soon double the price of e-cigarettes sold in the EU, although claims are arising that the change is aimed more at raising revenues rather than improving health.

Controversy is rising over the potential implications of a new proposal being prepared by the European Commission on the taxation of e-cigarettes in the EU, which, if approved, could see the price of such devices rise significantly.

Currently tobacco products sold in the EU are required to be taxed at a rate of at least 57 percent, prior to any other regional VAT being applied, but e-cigarettes do not fall under the scope of the tobacco tax, facing only the VAT rates.

The European Commission is now looking at tax measures which could bring the taxation of e-cigarettes in line with cigarettes and other tobacco products, a move which could nearly double the price of e-cigarettes.

Due to the increasing use of e-cigarettes by consumers in the EU, governments are now projecting that the collection of excise taxes from the sale of traditional tobacco products will drop, drastically reducing a major source of revenues.

The proposal on the taxation of e-cigarettes is intended to “…reduce legal uncertainty, hamper substitution by borderline products and avoid possible different approaches in member states”.

Some opponents to the proposal is aimed entirely at shoring up state revenues, with no consideration given to growing evidence that e-cigarettes are less harmful to smokers, and that such products are a viable method of quitting smoking entirely.

Photo By: Matt Trostle