The EU countries did not understand themselves on new taxes on normal and electronic cigarettes. What position did Romania and Bulgaria have

The Member States of the European Union failed to reach an agreement on the proposal of the European Commission on Friday to increase the minimum tax rates for cigarettes and to introduce them, for the first time, for new products, such as electronic cigarettes, EFE and Agerpres report.

“This proposal is essential for protecting public health and reducing cross -border acquisitions of tobacco and nicotine products,” said the Danish Minister of Economy, Stephanie Lose, at the press conference that followed the Ecofin Council, where the initiative was discussed for the first time.

The discussions have shown that the 27 Member States are divided among those that support the strongest initiative – about ten countries, including Spain, France and Germany – and those who still have many reservations and even express their concerns about it, Italy being at the forefront.

What the new proposal provides for

The proposal, presented in July, requests the increase of the minimum tax rates for cigarettes and their first time for new products, such as electronic cigarettes and nicotine envelopes, because the current levels are not desired.

The minimum rate is considered in 40% of the retail price for cigarettes and cigars, 62% for rolling tobacco, 50% for pipe tobacco and 55% for heated tobacco.

For the liquid used by electronic cigarettes, the minimum tax will be 20% in the case of less than 15 milligrams of nicotine per millilite and 40% over this level, while for nicotine envelopes will be 40%.

However, the minimum taxes will be adjusted by each country according to the level of its prices, and the states will continue to have the last word in establishing their rates as long as they respect these thresholds.

The European Commission believes that the measure will update the minimum levels, which have become outdated, given that the rates imposed by the countries are, on average, double compared to the minimum level, and will ensure that the new products that mainly attract young people are taxed, because not all states do so.

Romania and Bulgaria are afraid of increasing smuggling

Of the countries that expressed their doubts about the measure, several considered the minimums proposed to be too large, especially for traditional cigarettes, that the adjustment of minimums to national inflation would generate an unequal impact between states and that national specificities should be considered more.

Some states, such as Bulgaria and Romania, considered that the increase of taxes would lead to more intense smuggling with tobacco and pleaded for alternative ways to combat fraud with these types of taxes.

The Spanish Minister of Economy, Carlos Cuerpo, praised the proposal and expressed his confidence that, although “sensitive elements”, such as indexing, they will remain to be resolved, it will be possible to find a “balance”, because the measure follows the “essential” principles of “struggle for citizens' health and against fraud”.

In the presentation of the measure, the Commission stressed that the taxes contributed to a 40% decrease in the level of tobacco consumption and noted that it remains 24% in the EU, despite the fact that tobacco is responsible for 700,000 deaths per year and a half of smokers die prematurely.

Moreover, it is estimated that the increase of minimum taxes will generate additional revenues of 15 billion euros and will save six billion euros from health expenses.

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