The European Commission is pressing on with its plans to have an EU-wide tax on nicotine pouches and e-cigarette fluid, in addition to a sharp increase in the minimum tax rate on tobacco. Epicenter's experts at the EU Regulatory Observatory have been assessing the proposals and are unimpressed.
I've written a short briefing with Constantinos Saravakos outlining their views and discussing some of the main dangers.
The main findings are:
- The TTD’s extension of minimum taxes to low-risk nicotine products conflicts with the EU’s goal of reducing smoking prevalence.
- Taxing safer alternatives will likely increase consumption of more harmful cigarettes.
- Higher minimum tobacco taxes will stimulate the illicit market, particularly in Eastern Europe.
- The proposal is highly regressive and fails to account for income differences across member states.
- The principle of differentiating taxes by relative risk is sound and should be strengthened, not diluted.
- A risk-proportionate reform would impose minimal or zero EU-level taxes on e-cigarettes and nicotine pouches to maximise substitution away from smoking.
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