Holiday cigarettes to go up in smoke
The tradition of bringing back hundreds of cheap cigarettes from holidays abroad is about to go up in a puff of smoke.
Proposals are currently being examined which would see a dramatic increase in the tax on tobacco throughout the EU region. The moves are being made after research by the World Bank showed that burning a hole in people’s pockets is the best way to reduce the level of smoking.
Experts say that the proposed increase would cut the number of smokers by an average of 10pc over the next five years.
It is thought that changes will have the biggest impact in Poland where they expect more than 20pc to give up as a result of price increases.
The proposal outlined by Taxation Commissioner, Laszlo Kovacs, is for a gradual increase in EU minimum taxation levels on cigarettes and fine-cut tobacco up to 2014.
It would also remove loopholes that allow some cigarettes or fine-cut tobacco to be presented as cigars, cigarillos or pipe tobacco and so benefit from a lower tax rate.
The plan also aims to bring tobacco taxation levels in line across all 27 EU member states.
At the moment, the difference in taxation can be as high as 600pc leading to intra-EU tobacco smuggling especially in the new member states.
The level of smuggling varies across the EU and accounts for up to 9pc of the EU tobacco market. But in some major markets this is as high as 20pc. The countries most susceptible to illegal tobacco are those closest to Russia and other markets that do not impose high tax on cigarettes.
Mr Kovacs said it would also make the taxation rules more transparent, and create a level playing field for manufacturers and give flexibility to member states to set minimum taxes.
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