The European Commission announced that the proposal for the revised tobacco excise directive will be made public at the beginning of 2022’s fourth quarter during a digital consultation session that was held on May 18, 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The Commission highlighted that tobacco taxation is outdated asit has not been revised since 2010, and does not capture the developments in the tobacco market or the inflation rates of the last decade.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, the harmonization of new tobacco products such as e-cigarettes, heated tobacco products and nicotine pouches and tackling the illicit trade and manufacturing of tobacco products. 

The Commission referred to the results of the extensive public consultation, including pieces of 7300 input from all 27 EU members as well as other third countries, where governments, organizations and citizens highlighted the need to harmonize new products, but not tax them at the same level as traditional cigarettes. In its referral, the Commission mentioned that all the aforementioned factors were taken into account.

Also worth mentioning is 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 as part of the EU’s harmonized excise framework, develop standard definitions and remove obstacles to the single market.

The prevailing view among all categories of stakeholders was that an EU tax minimum for heated tobacco products should be set at a level lower than fine-cut tobacco and that e-cigarettes should be taxed at the lower proposed levels (€0.10 per ml) or according to consumers themselves at a zero minimum rate.

Reportedly, the participants of the May 18 stakeholder event commented on the raised issues raised much in the same way as was done during a public consultation in 2020. Specifically, NGOs were supportive of the need to tax all products in a similar way, but industry and academia representatives disagreed and instead supported moves to tax them based on their risk profile.

Though the Commission did not refer to any details during this meeting they did mention that this directive is a public health and internal market issue. It is therefore safe to assume that the proposal will include a significant “upward convergence” of all tobacco products as described in the EU’s Beating Cancer Plan, which is also the main driver for the directive. 

It remains to be seen how each of the European Union’s members will react to the proposal within the current economic and fiscal environment and also whether it will take into account the results of the consultation with European residents.

The full official report on the results of the open public consultation can be read here

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By: Nicholas Waller
Title: Commission to launch proposal for revision of tobacco excise directive by Oct. ’22
Sourced From: www.neweurope.eu/article/commission-to-launch-proposal-for-revision-of-tobacco-excise-directive-by-oct-22/
Published Date: Tue, 24 May 2022 18:15:05 +0000

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