The EU’s minimum tax on vapes will be increased by 50% according to a new draft of the Tobacco Taxation Directive dated 18th February and seen by Clearing the Air.
In a previous proposal, the minimum rate for vapes was set at €0.20 per millilitre of eliquid (around €0.40 per pod or €2 per 10ml bottle). However, the Cypriot Presidency of the EU Council has proposed an increase to €0.30 (or around €3 per bottle).
“Many Member States also commented that the proposed rate of €0,20 euro per millilitre was low” the proposal states. “The Presidency recognizes that the previous proposed rate was equal to the rate already applicable in the majority of the Member States, and hence may not be ambitious enough for the EU Directive going forward, especially taking into consideration the rapid popularity that these products gain”.
The new rate “will impose a rate increase for the majority of the Member States”, the document concludes.
The Cypriot proposal does go some way to reducing the high burden imposed on nicotine pouches.
“The Presidency has examined the existing trends within the Member States and concluded
that the taxation on nicotine pouches varies widely”, they say. “Out of the 14 Member States that currently tax nicotine pouches, 6 Member States tax 50 euros per kilogram or below, 4 Member States tax 120 euros or more and 5 Member States vary in between. It is evident, however, that the proposed rate of 143 euros per kilogram is higher than most of the currently applied rates per kilogram in Member States”.
“Since the Presidency has also received a number of comments from Member States regarding the rate being too high, the Presidency proposes a lower rate of 107 euros per kilogram” they continue. “The proposed rate…will provide an excise duty increase for 10 of these Member States, whilst the transitional period rate of 71,5 euros per kilogram will provide an excise duty increase for 6 of these Member States”. It will of course be a huge increase in the 13 Member States which choose not to apply tax to nicotine pouches.
Michael Landl, of the World Vapers Alliance, was scathing about the proposal.
“The situation is getting worse and worse,” he said. “Despite all the evidence that higher prices push consumers back to cigarettes or the black market and hit low-income citizens the hardest, the EU Council is now pushing for a 50% tax hike over their last proposal”.
“This is a direct assault on those trying to quit. Vapers are not piggy banks for government budgets; we just want to stay away from smoking”.
EU Countries will debate the new proposals on 25 February.
