Myth: EU plans to put super-tax on e-cigarettes
InFact: The European Commission has begun the “first steps” in a review on excise duty for tobacco products. E-cigarettes will be considered, but there are no suggestions they will be taxed at the same rate as normal cigarettes.
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Nigel Farage tweeted he is “appalled” to learn the EU plans to tax e-cigarettes at the same levels as tobacco. On this basis, the UKIP leader concludes, “All vapers must vote to Leave EU!”
Other Brexiteers voiced outrage at the suggestion e-cigarette products might face excise duty of 57%, on top of the 20% VAT already paid. Vote Leave noted that the tax hike was at odds with Public Health England recommending e-cigarettes to the NHS.
What’s the source?
The story originated in a Times article, with Leave campaigners also linking to a later version in the Daily Mail. The Times said e-cigarettes were “set to soar in price” and that “vaping will be brought in line with cigarettes and cigars”. Lower down, however, the piece spoke of the “first steps” in a review and said “officials will now decide what level of excise duty should apply to them”.
It was telling that the Daily Mail, having published a similarly sensational story, later toned down its article. It admitted taxes might not be “identical” to tobacco products, linked to a more objective piece in the EU Observer and changed the words “set to” to “could” in its headline.
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What actually are the EU’s plans?
InFacts contacted the European Commission, which said the Times article was “incorrect” and there were “absolutely no plans at this stage to introduce excise duty for e-cigarettes. Nor has there been any suggestion that e-cigarettes would be taxed at the same level as cigarettes.”
Neither is the Commission the driving force behind this review. As the Times pointed out, it was initiated by members of Coreper – ambassadors from each of the 28 member states. And should a change in tax be proposed, it would require the unanimous support of all EU governments.
The Commission said it must also include “an impact assessment, a public consultation and carry out a lot more technical work” before conclusions are made. These will consider the public health implications of raising the price of e-cigarettes and the long-term budgetary implications of tax-free vapes; the threat of national taxes on e-cigarettes could undermine the EU’s internal market (4.2).
£100 for an e-cig?
The Times included a table of possible price rises if e-cigarettes were taxed at the same levels as cigarettes. Brexit campaigners posted the table via social media.
The Times reckons users could end up paying as much as £100 for a “box mod” – a large type of vaping device. But going by the experience of the US, the suggestion that specific devices could be taxed as highly as cigarettes seems somewhat fanciful. With the exception of Minnesota, US states tend to tax only the nicotine liquid rather than the whole device. That makes the Times’s price predictions, while not inconceivable, rather unlikely.
This article is an adaptation of a piece that previously appeared on InFacts.
Edited by Alan Wheatley
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