Commission launches tobacco-taxation review

The Commission has launched an online stakeholder consultation seeking input for the review of the current EU tobacco-tax legislation, on which a proposal is expected before the end of 2007.

“I am going to make a legislative proposal on tobacco taxation at the end of this year. Recent discussions with business and member states indicate that there is a need for modernisation and simplification,” said Taxation Commissioner László Kovács. 

He underlined that the new proposal, due by the end of 2007, must both ensure the proper functioning of the internal market and respect other EU policies, in particular health protection.

One of the issues addressed by the consultation document is the approximation of retail selling prices between high and low taxing member states. “The attraction for individuals in high-taxing countries to make their purchases in lower taxing countries undermines health-protection objectives. Therefore, to counter this threat, EU minimum rates would need to be increased substantially,” argues the document.

The consultation on the structure and rates of excise duty applied on cigarettes and other manufactured tobacco, launched on 30 March, is open until 1 June 2007. The Commission expects contributions in particular from the government administrations, businesses involved in the manufacturing and distribution of tobacco products, health organisations, NGOs and other organisations representing consumers or other stakeholders.

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