Dutch minister wants vaping as expensive as smoking under new tax plan

State Secretary for Finance Eelco Eerenberg has drafted legislation for a national tax, saying the Netherlands does not want to wait for the European Union to agree a common approach.

The level of the proposed duty has not yet been announced. The government currently intends to introduce it from 1 January 2029, with the bill expected to be submitted to the Dutch parliament in early 2027.

Eerenberg said the policy was intended to discourage young people from vaping, or prevent them from taking it up.

The Netherlands has been one of the countries pressing for vaping products to be included in the EU’s tobacco taxation rules. The existing EU directive, adopted in 2011, doesn’t cover vapes in the same way as traditional tobacco products.

Sixteen EU countries, led by the Netherlands, called for the directive to be updated in December 2024. They argued that different national rules and tax rates were fragmenting the market and creating an uneven playing field. An EU-wide proposal remains pending.

The Dutch government says its national measure would be temporary if Brussels eventually agrees a common tax.

“That is why we also hope that there will be a European approach. As soon as there is one, we will simply withdraw this proposal. And they know that in Europe as well,” Eerenberg said.

A tax designed to change behaviour

The proposed Dutch duty follows a familiar argument from governments introducing taxes on nicotine products: increasing the price should reduce demand, particularly among young people and non-smokers.

That objective is also being used to justify the UK’s new Vaping Products Duty, which came into force on 1 October. The UK duty is set at £2.20 per 10ml of vaping liquid, equivalent to 22p per millilitre, and applies whether or not the liquid contains nicotine.

The UK government has also increased tobacco duty by an additional £2.20 per 100 cigarettes or 50 grams of tobacco. It says this is intended to preserve a financial incentive for people who smoke to switch to vaping.

The Dutch proposal raises a similar question about how tax policy should distinguish between vaping as a route away from smoking and vaping among people who have never smoked.

Public health bodies in the UK continue to state that vaping is less harmful than smoking and can help adult smokers quit. A policy that brings the price of vaping close to that of cigarettes could reduce the financial reason for smokers to switch, depending on the final rate and how businesses pass the duty on to consumers.

The Dutch government has acknowledged another potential problem. Vapes can be bought online and across national borders, which could make a single-country tax easier to avoid. Consumers may look for cheaper products elsewhere, while illegal sellers could gain an advantage if legal products become significantly more expensive.

That risk is particularly relevant in the Netherlands, where the government said in April that research had found widespread use of illegal or illegally supplied vapes. The government cited a study estimating that 87 per cent of people who vape used products from the illegal market or bought them through a prohibited sales channel. The figure included products with excessive nicotine levels, prohibited flavours or sales through banned outlets.

Taxation alone is unlikely to resolve those problems. If legal products become less affordable without effective enforcement, some consumers may move towards cross-border purchases or illicit supplies rather than stop vaping.

The wider European debate

The Netherlands’ move comes as EU countries continue to debate how newer nicotine products should be regulated. The 2024 joint call to the European Commission included France, Germany, Ireland, Spain, Belgium and Portugal, among others.

The countries said a common framework was needed because national governments were already introducing different approaches. Some countries have focused on taxation, while others have proposed restrictions on flavours, disposable vapes or where products can be sold.

The delay over an EU-wide tax has left governments to decide whether to act alone. National measures can be introduced more quickly, but they may also create different prices and incentives across borders.

For smokers, the effect will depend on the relationship between the final vape duty, tobacco duty and the cost of other quitting options. A tax that targets youth uptake while preserving a clear price difference between vaping and smoking would send a different signal from one that makes the two products cost roughly the same.