European Union finance ministers have been discussing the possibility to scrap the current exemption on excise duties on e-cigarettes, which could result in a massive rise in consumer prices.
Rules on traditional tobacco products state that 57 per cent of the retail prices of a packet of cigarettes must be made up from duty, with another 20 per cent taken up by VAT. Currently, only 20 per cent VAT applies to e-cigs, but if taxes were raised to equate those of tobacco products, the consumer could potentially see the 57 per cent tax increase reflected in the price they would pay for their devices and related products.
Ministers have asked the European Commission to make a decision on this issue by 2017, and whilst many are concerned about how an increase in price of electronic alternatives will impact efforts to decrease the number of tobacco smokers, a spokesperson from the EU Commission has stated discussions are only in the fledgling stages, “Before taking any decision, we would need to carry out an impact assessment, a public consultation and carry out a lot more technical work. The Commission will carefully list to EU government and fully consider their requests and views.”
E-cigarettes are now the most popular method of support used by those trying to move away from traditional tobacco products in Britain, and some have used the threat of a potential price increase as evidence to support an exit from the EU in the upcoming referendum.
