2017年-世界发展银行全球_Tobacco_Taxation_in_the_European_Union___An_Overview_20页_1mb

Summary of Tobacco Taxation in the European Union

Core Content

The European Union (EU) has a long-standing history of tobacco tax harmonization, with over 40 years of experience, making it the world's most experienced region in this area. The process of harmonizing excise duties on tobacco products has evolved in stages, aiming to balance multiple objectives such as ensuring a functioning internal market, promoting public health, and securing revenue for Member States.

Main Objectives of Tobacco Tax Harmonization

• Functioning of the Internal Market and Competition: Harmonization was necessary to ensure free movement of goods and fair competition. Member States agreed that excise duties should not restrict the setting of retail prices, allowing for price variations based on local economic conditions.
• Contributing to Health Protection: Reducing tobacco consumption is a key goal, driven by the health risks associated with smoking. This has led to a gradual increase in excise duties, which has contributed to a decline in cigarette consumption while maintaining stable revenues.
• Ensuring Revenue for Member States: Despite the health protection objective, Member States also rely on tobacco excise duties for revenue. Harmonization helps ensure that this revenue is collected fairly and consistently across the EU.

Key Information

Current Excise Duty Structure

• Tobacco Market in the EU: In 2015, the EU released 493 billion cigarette sticks and 88,000 tons of smoking tobacco for consumption.
• Taxation Policy: The EU uses a "mixed structure" for excise duties on cigarettes, combining:
  • A specific component (a fixed amount per 1000 cigarettes), ranging from 7.5% to 76.5% of the total tax burden (TTB).
  • An ad valorem component (a percentage of the maximum retail selling price).
• Minimum Rates:
  • Cigarettes: At least €90 per 1000 cigarettes and at least 60% of the weighted average retail selling price.
  • Fine-cut smoking tobacco: 46% of the weighted average retail selling price or €54 per kilogram.
  • Cigars and Cigarillos: 5% of the retail selling price or €12 per 1000 or per kilogram.
  • Other smoking tobaccos: 20% of the retail selling price or €22 per kilogram.
  • These minimum rates are expected to increase by 2020.

Revenue and Consumption Trends

• Consumption Decline: Cigarette consumption dropped from nearly 800 billion pieces in 2002 to just under 500 billion pieces in 2015.
• Revenue Stability: Despite declining consumption, total revenue from excise duties on cigarettes remained relatively stable between 2008 and 2015 due to increased tax rates.
• Tax-Induced Substitution: Some consumers switched to cheaper alternatives like fine-cut tobacco, which is taxed less. The EU has addressed this by gradually increasing minimum tax rates on fine-cut tobacco.

Decision-Making Process

• Council of the EU: Legal acts (Directives) are adopted by the Council, which requires a qualified majority for most decisions, though some areas (like tobacco taxation) require unanimous agreement.
• Transitional Periods: Some Member States, particularly new ones, were granted transitional periods to align with EU minimum rates. By 2017, most had reached or were close to meeting these rates.

Lessons Learned

• Stability Over Frequent Revisions: Setting relatively high minimum rates with transitional periods has been more effective than frequent, small revisions.
• Incentives for Compliance: Legal deadlines have served as strong incentives for Member States to increase excise duties even before the end of transitional periods.
• Success in New Member States: Countries like Romania and Croatia successfully aligned their tax rates with EU minima through long-term, gradual increases.

Conclusion

The EU has demonstrated that tobacco tax harmonization can achieve multiple, sometimes conflicting, objectives. By balancing the need for a functioning internal market, public health protection, and revenue collection, the EU has managed to reduce tobacco consumption while maintaining stable excise duty revenues. This experience underscores the importance of a structured, long-term approach to tax policy, which is also applicable to new Member States seeking to align with EU standards.