In Europe cigarettes could soon cost more. The European Commission would be preparing a proposal intended to turn on the clash between European capitals: a radical reform of the tobacco taxation system, electronic cigarettes and nicotine sachets, with the aim of allocating part of the tax revenue today to the membership budget today in the hands of the Member States.
How much cigarettes will cost more
According to a series of reserved documents anticipated by Euctiv, the initiative could lead to an unprecedented increase in excise duties: we speak of +139 percent for cigarettes, up to +1,090 percent for cigars. In the face of these projections, Brussels would set up an increase in revenue for about 15 billion euros a year, resources that would no longer be managed by individual national governments, but would go directly to finance the community budget.
For Italian consumers – if the reform was approved – the impact would be significant: the prices of cigarette packages and heated tobacco products could increase by over 20 percent, also exceeding 1 euro more per pack. According to estimates of the same EU, this could have an impact on inflation of over half a percentage point.
The plan to repay the debt of the Next Generation EU
The goal of the reform is to strengthen the “proper resources” of the European Union, that is, autonomous tax revenues to be used, among other things, to repay the debt contract with the Next Generation EU plan. So far the debate on these new revenues had focused on Carbon Tax, fee on business and digital. But now, for the first time, the hypothesis of leverageing the extraage deriving from the taxation of smoking appears on the Commission table.
But if the Commission defends the measure as a useful tool to reduce consumption for public health reasons, several experts and governments contest the strategy, underlining that previous experiences – such as the French one – have shown a strong increase in smuggling following sudden increases in prices.
Decision on July 16: comparison on in sight
The proposal will be officially discussed on Wednesday 16 July, when the European Commission will present the new package on its own resources. The measure, treated at the highest levels in Brussels, would have been prepared with very limited times: only 24 hours of internal consultation to examine a text of over 100 pages with impacts on agriculture, industry, public health and public finance.
Skepticism of Italy: Rome fears a dangerous precedent in the field of tax sovereignty
The prospect that these resources end in the community budget is considered unacceptable by different countries. Sweden Greece, Romania, Bulgaria and Italy are contrary to the proposal. Our country, which has always used the revenue of excise duties on tobacco as a resource for public accounts, is traditionally skeptical on European tax harmonization and fears a dangerous precedent in the field of tax sovereignty. Other governments, on the other hand, such as Poland, Spain, Portugal, Croatia and Hungary, despite not having still taken on an official position, look at the hypothesis of a European tax that risks feeding and penalizing national budgets.
