{"id":31424,"date":"2025-11-24T09:44:37","date_gmt":"2025-11-24T09:44:37","guid":{"rendered":"https:\/\/clearingtheair.eu\/?p=31424"},"modified":"2025-11-24T10:42:03","modified_gmt":"2025-11-24T10:42:03","slug":"economists-tell-eu-equal-taxes-on-vapes-and-cigarettes-erase-incentives-to-switch","status":"publish","type":"post","link":"https:\/\/clearingtheair.eu\/en\/post\/economists-tell-eu-equal-taxes-on-vapes-and-cigarettes-erase-incentives-to-switch\/","title":{"rendered":"Economists tell EU: equal taxes on vapes and cigarettes erase incentives to switch"},"content":{"rendered":"
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Experts warn new tax plan could push smokers toward illicit tobacco instead of safer alternatives<\/em><\/p>\n\n\n\n

Economists warned EU lawmakers today that taxing vaping products and other smoke-free alternatives at the same rate as cigarettes could discourage smokers from switching to less harmful options – and drive some to the black market.<\/strong><\/p>\n\n\n\n

At a hearing<\/a> of the European Parliament\u2019s Subcommittee on Tax Affairs (FISC), Professor Francesco Moscone said the European Commission\u2019s new Tobacco Taxation Directive (TTD) risks blurring the difference between high-risk and lower-risk nicotine products.<\/p>\n\n\n\n

He told MEPs that the plan \u201cdoes not align with scientific evidence\u201d and said: \u201cEqual taxation for unequal risks removes price incentives for smokers to shift to less harmful alternatives. A sharp increase in prices will push consumers toward illicit products rather than cessation.\u201d<\/p>\n\n\n\n

Commission insists the plan is about the single market – not health<\/strong><\/h3>\n\n\n\n

The European Commission says it wants to update outdated rules and stop big differences in nicotine taxes between EU countries. The proposal would set minimum taxes for e-liquids, nicotine pouches and heated tobacco for the first time.<\/p>\n\n\n\n

Ms Maria Elena Scoppio, <\/strong>a senior Commission tax official, said the aim is to avoid cross-border shopping and market distortions, not to create a health-based tax system.<\/p>\n\n\n\n

She told the committee: \u201cThe objective.. is not related to health, but with the internal market.. Member States do not know how to treat the substitutes of the traditional tobacco products in a way that prevents distortions.\u201d<\/p>\n\n\n\n

On concerns about Brussels overreach, she added: \u201cThis proposal is subject to unanimity.. and does not have a real impact on fiscal sovereignty.\u201d<\/p>\n\n\n\n

Economist: higher vape taxes could backfire<\/strong><\/h3>\n\n\n\n

Professor Moscone said scientific agencies consider non-combustible nicotine products to be less harmful than smoking. He said: \u201cHeated tobacco, nicotine pouches, and e-cigarettes are identified as less harmful.\u201d<\/p>\n\n\n\n

He warned that new nicotine products are especially price-sensitive, meaning tax hikes could push consumers in the wrong direction. He said: \u201cResearch.. suggests new nicotine products are more price sensitive.. a sharp increase in prices will push consumers toward illicit products rather than cessation.\u201d<\/p>\n\n\n\n

He also pointed to the Commission\u2019s own estimates, saying: \u201cThe proposed excise adjustment could raise EU-wide inflation by around 0.55 per cent.. This is not a trivial matter.\u201d<\/p>\n\n\n\n

Industry warns of impact on lower-income countries<\/strong><\/h3>\n\n\n\n

Representing Tobacco Europe, Christa Pelsers said the proposed increase in the minimum cigarette tax – from \u20ac90 to \u20ac215 per 1,000 cigarettes – would hit certain countries hardest.<\/p>\n\n\n\n

\u201cConsumers in low-income Member States.. would be hardest hit,\u201d she said. She argued the plan does not reflect differences in risk between products, saying: \u201cThe excise differentials do not reflect the risk-differentiated profiles.. Equal taxation for unequal risks distorts competition.\u201d<\/p>\n\n\n\n

Pelsers also warned about illegal tobacco, saying: \u201cIt\u2019s a myth that price increases would not affect demand.. the more incentive the consumer has to switch.. that includes lower-priced illicit cigarettes.\u201d<\/p>\n\n\n\n

Public-health experts challenge industry arguments<\/strong><\/h3>\n\n\n\n

Dr Hanna Ross, an economist specialising in tobacco control, told MEPs that cigarettes remain too affordable in many EU countries and that a higher minimum tax is justified.<\/p>\n\n\n\n

She said: \u201cAffordability.. is declining in Romania, Poland, Czech Republic.. we do need to decrease the affordability of cigarettes.\u201d<\/p>\n\n\n\n

She said claims about tax-driven illicit trade were exaggerated, adding: \u201cThe relationship between taxation and illicit trade is weak, if non-existent.\u201d Ross also warned that low taxes on newer nicotine products hand manufacturers unusually high profits. She said: \u201cIf the government doesn\u2019t take their fair share.. the industry will take it.. profit margins on these novel products are enormous.\u201d<\/p>\n\n\n\n

Advocates say low taxes fuel youth uptake<\/strong><\/h3>\n\n\n\n

The Smokefree Partnership\u2019s Gies van Wyk called for stronger taxes on all nicotine products, warning that many are designed to appeal to teenagers.<\/p>\n\n\n\n

He said: \u201cThese products are addictive, heavily marketed, and designed to appeal to young people.. Without consistent and robust taxation, they remain an open gateway to addiction.\u201d<\/p>\n\n\n\n

MEPs: national sovereignty vs. risk-based taxes<\/strong><\/h3>\n\n\n\n

MEPs were split on the issue. Some argued EU countries must keep control over their own tax policies, while others asked why lower-risk products were not being taxed less.<\/p>\n\n\n\n

Luxembourg MEP Fernand Kartheiser said: \u201cTaxation is a national competence.. what we are really discussing here is an overreach of Commission competence.\u201d<\/p>\n\n\n\n

Italian MEP Marco Falcone pressed the Commission on risk differences. He said (translated from Italian): \u201cWould it not be preferable to increase the tax differential between lower-risk products and traditional smoked products?\u201d<\/p>\n\n\n\n

What this means for consumers<\/strong><\/h3>\n\n\n\n

The core question for millions of smokers and vapers is whether the EU will:<\/p>\n\n\n\n