The EU Commission is currently consulting on a revision to the Tobacco Excise Directive, which could see reduced risk products such as e-cigarettes being included. Our associate Clive Bates has written an in depth briefing together with NNA which details why this is a very bad idea. The full briefing can be read here. The consultation can be found here.
There is no case on principled or practical grounds to apply excise duties to vaping products and other products that offer a much safer alternative to smoking. The value to health and wellbeing associated with switching from smoking to vaping will exceed any benefits arising from revenue collection.
Just as it was with the Tobacco Products Directive, the inclusion of products which do not contain tobacco in the Tobacco Excise Directive is unhelpful and risks creating confusion in the minds of consumers.
If vapour and other reduced risk products are to be included in the directive then our view is as follows:
- Excise policies on reduced risk products can have a significant negative impact for human health and is inconsistent with EU requirements to make policy with a high level of health protection.
- The EU principle of 'non-discrimination' requires that products with very different characteristics are not treated in the same way - the vast difference in health risks means that reduced risk products must have zero or very low taxation relative to smoked tobacco products.
- There is an opportunity to create a regime which will incentivise use of the safer products.
- The risk is that poor policy will reduce this incentive, and so protect the market for smoked tobacco products.
- Excise duty is a 'sin tax' and switching to low risk products is a virtue to be encouraged, not a sin to be taxed.
Our recommendations for low risk non combustible products are as follows:
- If they are included in the directive then a zero rate duty must be allowed.
- There should be a maximum rate set which reflects the very substantial difference in risk compared to smoked tobacco.
We urge the European Commission, European Council and member state tax authorities to take great care in striking the balance between public health, revenue raising and administrative costs. The institutions involved should conduct thorough impact assessments, take a hard look at the risks of causing harm to health and then think again about imposing excise duties on products that are already helping millions of Europeans to improve their health and wellbeing and have the potential to help millions more.
Please do read the full briefing and have your say. Make sure your MP also understands your concerns.