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European Union Proposes to Increase Vape Tax
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European Union Proposes to Increase Vape Tax

The European Commission (EC) has proposed plans to implement an excise tax on vape products and other tobacco products. The proposal, if it comes into law, will impact all members of the European Union (EU).

These updates to the Tobacco Tax Directive (TTD) are expected to be released from Brussels later in the week.

The items in question include vape and e-cigarette products, traditional combustible cigarettes, and heat-not-burn tobacco products. Novel tobacco products in particular were highlighted in the report due to their appeal to the underage population.

One of the main concerns for the European market is unsteady tobacco taxes across the union. While some countries suffer from much higher taxes, certain states are flaunting dangerously low taxes.

Unifying the tax will allow for better regulation, particularly in countries that are further removed from the EU’s goal of reducing tobacco harm.


The Proposed Tax

The hope for the EC is to have tax uniformity across the union, similar to the federal laws found within the United States. This was raised in a 2020 report in order to keep a hold on the ever-expanding vape market.

The report outlined a few of the changes that are hoped to be made. These include an excise tax ranging from 20-40% on vape, e-cigarette, and other novel tobacco products based on their nicotine contents. However, this could be higher for certain products if higher taxes are deemed necessary.

Of course, the report has outlined underage vaping as one of the main reasons for the proposed tax increase on these products.

Other proposed taxes include a wholesale duty of 55% on heat-not-burn tobacco products.

“On the market side, developments have accelerated within new e-cigarettes, heated tobacco products and a new generation of modern products are coming into the market (containing nicotine or cannabis),” the report stated. “The current lack of harmonization of the tax regulatory framework for these products is also restricting the possibility to monitor their market development and control their movements.”

Thankfully, vape products are not the only target. Traditional cigarettes will also see an increase of about double the existing excise tax.

This would take the tax on a packet of 20 cigarettes  €1.80 to €3.60. This would also result in price increases in certain states in Eastern Europe that are currently able to sell a pack of cigarettes for less than €3.

These very low prices can easily be seen as a direct reason for such high smoking rates in these countries.


Importance of Increasing Cigarette Tax, Not Just Vapes

There is speculation from many that increasing excise tax is not the way forward.

One of the biggest shortcomings of increasing vape taxes is that it can result in those wanting to quit smoking simply reverting to cigarettes. Although it is not ideal that vape products will also be subject to increased taxes, the increase in cigarette taxes may curb this downside slightly.

Those who would prefer to continue smoking, especially in certain countries where cigarettes are particularly cheap, may turn away from traditional tobacco products due to the overall price increase of cigarettes.

While the EU has openly adopted the benefits of vaping as a tool for tobacco harm reduction (THR), increased vape taxes only confuses the public about whether these products offer a safer alternative. This has been seen in countries like Australia where vape taxes have risen, while cigarette taxes have remained relatively unchanged.


What Will the Effect of the Taxes Be?

Should the tax proposal come into implementation, there will be various changes to the tax structure of traditional and novel tobacco products.

Any potential introduction of further taxation comes with scrutiny. Peter van der Mark warned that “if you have a sudden very steep increase, you can create a market for illicit trade.” Van der Mark is the secretary-general of the European Smoking Tobacco Association.

This level of speculation is often unseen during decision-making processes in other countries hoping to regulate the vaping market further. Decision-makers seem to simply ignore the negative implications of banning or tightly regulating certain products.

The EU does appear to understand, or at the very least acknowledge, the potential shortcomings of increased taxation.

In any case, the proposal could easily be derailed, though. If any European state vetoes it, it may be completely halted.

British American Tobacco has aired its concerns that this has the potential to be “the beginning of a long legislative process,” even if all parties are in agreement.


The EU Parliament’s View on Vaping

At the start of 2022, the EU became the first elected chamber to adopt vaping as a means to reduce the harm caused by traditional tobacco products.

Despite this, there are many that believe the EU is conducting its own “war on vaping.”

The United Kingdom is one of the global leaders in regard to the adoption and promotion of vaping as a smoking cessation tool. With its post-Brexit status, they are not subject to this EU proposal.

UK experts have reacted to the EU’s proposal with criticism. Neil McLaren, the CEO of vaping.com/uk, has warned that the UK needs to continue on its current path to promote the use of vapes through its separation from the EU.

“This move from Brussels is disappointing but not surprising, given the European Commission’s war on vaping,” he told Express. “Instead they should be looking at reducing VAT on vapes to 5%, in line with other nicotine replacement therapies like nicotine patches and gum.”


The bottom line

The European Commission has proposed a plan to implement further taxes on various tobacco products. Traditional combustible cigarettes, heat-not-burn tobacco products, and novel tobacco products like vapes and e-cigarettes will all be subject to increases as part of the EC’s plan to reduce tobacco consumption rates across the EU.

While the EU was once praised as the first elected chamber to endorse the usage of vaping products as a smoking cessation tool, they have come under fire for waging a potential “war on vaping” in recent times.

Robert Barnes Author Picture

Robert Barnes

For both health and financial reasons, I knew I had to quit smoking cigarettes. At a certain point I felt as if I had tried everything and it was too difficult to quit cold-turkey. That's when I found vaping and I've been off the stinkies ever since! I love testing and reviewing the latest vaping gadgets, marathoning television series and playing with my awesome dog Lupa.

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