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EU wants smokers to pay more for cigarettes

Smokers in Europe will have to pay more for their cigarettes under plans by Brussels to increase minimum tax levels on tobacco over the next six years.

The European Commission said that the move, which will affect smokers in some of the newer EU member states hardest - will help cut tobacco consumption by 10 per cent over the next five years.

Currently, excise duties on cigarettes must account for at least 57 per cent of the price and be at least €64 per 1,000 cigarettes, for products falling into the most popular price category."

The European Commission is proposing to raise the percentage to 63 per cent and the rate to €90 for all cigarettes by 2014. It also plans to update definitions of different types of tobacco products, so that loopholes are removed which allow certain products to be presented as cigars, cigarillos or pipe tobacco and so enjoy a lower tax rate.

The commission estimates that the impact could be to increase prices in some newer members states - such as Bulgaria and the Czech Republic - by more than 30 per cent, and in Poland by more than 40 per cent. However, in countries such as Ireland, the UK and Denmark, where tobacco products are already heavily taxed, there would be no impact.

Source: The Financial Times, 17th July 2008
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