The European Commission will draft plans to dramatically increase the price of electronic cigarettes in a move that would bring their tax in line with tobacco. The new directive would force member states to impose tobacco taxes on top of VAT for e-cigarettes.
Currently, this rate of tax is at least 57%. Ambassadors in Brussels voted last Friday (February 26th) to task the Commission with drafting “appropriate legislative proposal” next year. It will go before finance ministers on March 8 for endorsement, and will not be discussed further.
Work to introduce the tax regime will be “intensified”, according to draft conclusions, if the market share for e-cigarettes and related “novel” products show a tendency to increase. Forecasts show that sales, which reached approximately €7.5 billion last year, will swell to as much as €46 billion by 2030 at the latest.
Last August, British health officials announced that e-cigarettes were 95% safer to use than tobacco and went as far as to suggest doctors be permitted to prescribe the devices to smokers. A 2014 study published in the journal Addiction found that e-cigarettes can boost a smoker’s chances of quitting by 60% compared to gum, patches or pure willpower.
This month, the Advertising Standards Authority for Ireland introduced a new code stating that e-cig ads should be "socially responsible" and not encourage non-smokers or those under 25 to purchase them. In May, the EU will reclassify the devices as tobacco-related products in advertising terms.
