Netherlands Leads Initiative to Address Challenges Faced by Member States
Sixteen EU countries, led by the Netherlands, have asked the European Commission to propose a new law in the coming months on taxing tobacco in the bloc, including new products such as electronic cigarettes (vapes), which are not covered under the existing legislation. The initiative has the support of Croatia, the Czech Republic, Denmark, Estonia, Finland, France, Germany, Latvia, Slovakia, Spain, Belgium, Bulgaria, Ireland, Slovenia, and Portugal.
In a joint letter seen by Reuters, finance ministers from these countries argue that an update to the bloc's 2011 EU tobacco taxation law is necessary due to the absence of EU regulations on vaping. Each country currently applies different rules and levels of excise tax, distorting the bloc's single market.
Current Directive Insufficient to Meet Challenges
The letter states, "Based on the current directive, most of these products cannot be taxed like traditional tobacco products. The provisions of the current directive are insufficient or too narrow to meet the challenges faced by the administrations of Member States given the ever-evolving offerings of the tobacco industry."
Member States have taken appropriate actions at the national level due to shortcomings in the EU legislation, leading to fragmentation, an uneven playing field, and, ultimately, the distortion of the internal market.
Delayed Update and Differing Rules Across Countries
An update to the EU tobacco taxation law was due at the end of 2022 but has been delayed. Governments want the new Commission, which took office on December 1 for the next five years, to address this issue urgently.
The European Commission has set regulatory standards for e-cigarettes, including limits on nicotine content and labels explaining they should not be used by non-smokers. Manufacturers must register with the government before selling. However, rules differ from country to country. For example, France prohibits the sale of vapes to people under 18 and bans their use in certain public places, while Italy lifted a ban on using electronic cigarettes in public in 2013, although use in or near schools remains forbidden.
Concerns Over Disposable Vapes
Disposable vapes have attracted particular attention from lawmakers in some European Union countries amid environmental and health concerns. France has moved to ban them entirely, and the German Federal Council, the upper house of parliament, has called on the government to push for a similar ban on disposable vapes across the EU.
As the EU continues to grapple with the challenges posed by the evolving tobacco industry and the rise of vaping, the call for a new law to include e-cigarettes in the bloc's tobacco taxation framework reflects the urgent need for a harmonized approach to address these issues.
