Taxmen seek e-cig pound of flesh

When the EU’s finance ministers meet on March 8, they are expected to endorse the European Commission’s drafting in 2017 of an ‘appropriate legislative proposal’ to tax electronic cigarettes under the same regime as cigarettes are taxed, according to an Euobserver story relayed by the TMA.

The ministers reportedly have said that electronic cigarettes and other novel products could cause ‘inconsistencies and legal uncertainty’ in the single market if they remained exempt from excise taxes.

And they apparently added that excise taxes or some ‘other specifically designed tax’ on novel products could help meet public health objectives.

However, Olivier Hoedeman of the Brussels-based pro-transparency non-governmental organization Corporate Europe Observatory said it would be “awkward” to put electronic cigarettes in the same category as regular cigarettes if the science wasn’t there yet.

The ministers have said that work on the new tax regime should be intensified if the market share of the novel products shows a tendency to increase.

The Euobserver piece reported that the ministers’ ‘draft conclusions’ said the European Commission was not ‘obliged to tax electronic cigarettes’, but if it did not act, EU members would want to know the reasons for such inaction.

Current EU rules require all EU countries to impose an excise tax of at least 57 percent on tobacco products, but in the case of electronic cigarettes most countries impose only VAT, at about 20 percent.

An EU official said the next steps would be to undertake studies, carry out impact assessments, and conduct a public consultation.