TaxPersonal TaxEC’s hand forced on single tobacco tax

EC's hand forced on single tobacco tax

The European Commission has admitted that it may be forced to introduce a transitional period for the introduction of a harmonised tobacco tax for countries joining the European Union.

This follows objection from EU candidate countries including the Czech Republic, Poland and Slovakia, claiming that ‘quick changes’ to excise duties would result in steep price increases and strengthen the anti-EU lobby.

Excise duties on cigarettes in these countries are 42%, substantially lower than the EU rate of 57%, and an immediate increase in the rate, would result in the price of a box of cigarettes rise by between 30% and over 110%.

An EC official told the Financial Times: ‘We want fair play in the internal market. But we also know we would be playing into the hands of anti-European voices if we do not grant transitional periods.’

Czech ambassador the EU, Libor Secka said his country was not opposed to tax harmonisation, but a sharp increase in cigarette prices would ‘turn public opinion against joining the European Union’.

Similarly, a Polish official said the less well-off could not afford more expensive cigarettes. He added: ‘The anti-EU parties will have a field day.’

Links

OLAF in European tobacco action

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