The proposed EU tax hike on nicotine threatens public health

By Karl Abramson, a Consumer Issues Fellow at the Tholos Foundation.

The European Union’s plan to propose a bloc-wide vaping levy tax and double the minimum cigarette tax can be expected to unleash catastrophic public health consequences across Europe, all while advancing the efforts of drug-smuggling criminal syndicates.  

A report from the Financial Times revealed that the European Commission will propose to change the EU’s 2011 tobacco taxation directive to include reduced-risk nicotine products like e-cigarettes and heat-not-burn devices. The plan also mandates European nations to charge a €3.60 excise tax per pack, doubling the current €1.80 minimum tax. Imposing taxes on reduced-risk nicotine products is a proven failure in the United States and can be expected to bring about similar effects in Europe.

E-cigarettes are shown to be 95% less harmful than traditional cigarettes by removing the carcinogen-producing combustion process while still delivering nicotine, something which researchers say does not cause significant short- or long-term harms. Just two weeks ago, the latest Cochrane Review published the strongest evidence yet that nicotine vapes help more people quit smoking than traditional nicotine replacement therapies like gum or patches.

As the price of a product increases, usage decreases. E-cigarettes are no different. According to the National Bureau of Economic Research, there is “consistent and robust evidence” that e-cigarette taxes increase smoking by driving consumers away from vaping products. The result of more cigarette smokers will be more smoking-caused illness and death. 

Heat-not-burn products similarly reduce a user’s exposure to harmful chemicals and have been largely responsible for a 43% decrease in smoking in Japan, where the novel products are most popular. Earlier this month, Europe imposed a ban on flavored heat-not-burn products that makes it less likely for adults who smoke to make the switch.

These decisions cost lives. In the state of Minnesota, the implementation of a vape tax was shown to prevent more than 32,000 people from quitting cigarettes. Researchers warned that implementing the tax on a national level would deter 1.8 million adults who smoke from quitting over a ten-year period. Extrapolating to the European Union, this would amount to nearly 2.4 million people.

According to a paper released last month, e-cigarette taxes increase combustible tobacco use among adolescents. One of the researchers, Dr. Michael Pesko, has said “my scientific opinion is that raising taxes on e-cigarettes…to levels equivalent to cigarettes will increase cigarette use among all populations and cause significant public health harm.” The EU should recognize the immense harm caused by vape taxes in America and avoid repeating these mistakes in Europe.

These tax hikes, imposed by the most privileged in Europe, would hurt the least privileged the most. Cigarette taxes are highly regressive, meaning they take more from low-income groups than high-income groups and low-income Europeans are shown to be more likely to smoke cigarettes than those with high-incomes.

Data from New York City shows that low-income people who smoke spend nearly a quarter of their income on cigarettes, while high-income smokers spend a measly 2% of income on cigarettes. A cigarette tax hike will take more money from those who can’t afford it. It is utterly cruel to increase the price of a product that users are addicted to, forcing them to forfeit more of their hard-earned money to the government.

It’s not just cruel, it’s downright dangerous. Increasing taxes on nicotine products will lead to a burgeoning illicit market run by nefarious crime syndicates. The U.S. Department of State has labelled these groups a threat to national security because they use their profits to fund human trafficking, money laundering, and terrorism.

Smuggling undermines health objectives by offering consumers products unfit for human consumption while reducing tax revenue the EU seeks. According to Europol, criminal smugglers make and launder billions of euros annually and the use of violence involved in serious organized crime has increased in frequency of use and severity.

Nicotine products are smuggled through the same routes as drugs and weapons, most clearly evidenced by the case of Al-Qaeda senior commander Mokhtar Belmokhtar who orchestrated the abduction of 32 European tourists in the 2003 Sahara hostage crisis. Belmokhtar’s tobacco smuggling raised funds for the terrorist group while earning him the nickname ‘Mr. Marlboro’. The EU’s nicotine tax hikes will give organized crime cartels a platform for further ventures and encourage them to further their operations in Europe. This will be a national security disaster and make Europe a significantly more dangerous place.

Increases in tax revenue must never come at the expense of human lives and these taxes would place millions of European lives at risk. The EU should abandon this foolish plan and commit to helping adults who smoke make the switch to reduced-risk products.  


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