Economists warn EU nicotine tax hikes will derail fight against smoking

LEADING international economists are warning that the European Union’s proposed new taxes on smokeless nicotine products could undermine efforts to reduce smoking, discourage smokers from switching to safer alternatives and even fuel illicit trade.

A new analysis by the Tax Foundation criticises the European Commission’s planned overhaul of tobacco excise rules, arguing that steep taxes on safer nicotine alternatives such as vapes, heated tobacco and nicotine pouches contradict the principle of risk-proportionate taxation.

Published as EU institutions debate revisions to the Tobacco Excise Directive, the report says taxation should reflect the sharply different health risks posed by nicotine products.

“A well-functioning excise tax system should reinforce, not undermine, broader public health goals,” it states.

It warns that taxing safer, smoke-free alternatives too heavily could slow progress against Europe’s smoking epidemic by making switching away from cigarettes less attractive.

The report also cautions that excessive tax increases could widen price gaps between legal and illicit markets, potentially fuelling smuggling and weakening both public health and tax revenues.

Reacting to the findings, Smoke Free Sweden leader Dr Delon Human said policymakers risk repeating the mistakes of traditional tobacco control by failing to distinguish between deadly cigarettes and far less harmful alternatives.

“Europe cannot tax its way out of the smoking epidemic by treating all nicotine products as though they carry the same level of risk,” said Dr Human.

“People smoke for nicotine but die from the smoke. Taxation policy should reflect that reality. If safer alternatives become too expensive or inaccessible, many smokers will simply continue smoking or return to cigarettes and that is the worst outcome of all.”

Dr Human said Sweden’s experience showed the value of risk-proportionate policies.

“Sweden has achieved the lowest smoking rates in Europe because safer alternatives have been accessible, acceptable and affordable,” he said. “The EU should be encouraging switching and should resist calls to impose new barriers in front of adult smokers trying to move away from cigarettes.”

 

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