The EU wants to introduce common minimum taxes on e-cigarettes, nicotine pouches and heated tobacco. The proposal has been heavily criticised by the industry association Nikotinbranchen, which believes that taxes should reflect health risks - not make smoke-free alternatives less attractive.
Taxes on nicotine products should reflect the damage to health. This is what we believe Inger Schroll-Fleicher, Secretary General of the Nicotine Industry Association, which represents manufacturers in the smokeless nicotine market.
"The nicotine industry wants a tax structure that reflects the health costs of the respective product categories," Inger Schroll-Fleicher tells VapeTjek in response to the European Commission's proposal to introduce new common excise duties on nicotine products across the EU.
EU wants new taxes on nicotine products
In mid-July, we presented EU Commission long-term budget for 2028-2034. The budget is significantly larger than before and requires new sources of revenue. Proposals include EU-wide taxes on electronic waste and additional taxation on the profits of large corporations.
The Commission also proposes a common minimum tax on cigarettes and smokeless nicotine products such as e-liquid, heated tobacco and nicotine pouches - even nicotine-free e-liquids will be taxed.
Criticism from the industry
The proposal is met with harsh criticism criticism from users, manufacturers and Retailers of smokeless nicotine products. Many EU countries already have their own taxes on e-liquid and nicotine pouches and the new rules will mean higher taxes in several regions.
In countries like Sweden, tax rates have been linked to the principle of harm reduction - with the aim of encouraging smokers to switch to smoke-free alternatives. This approach is not shared by the European Commission.
"The aim is to gain better control over new products by harmonising tax rules and introducing minimum rates. Member States are given the flexibility to adapt their taxation rules to market developments in each country. Increased taxation of new products reduces their attractiveness as tobacco alternatives," the Commission writes in its analysis.
The market for smoke-free products is growing
Several of the EU's major nicotine companies are now focusing on harm reduction. Sales of e-cigarettes, nicotine pouches and heated tobacco have increased significantly over the past decade, and dedicated vaping shops compete directly with cigarette sales.
The tobacco industry has also seen opportunities in the shift - with the ambition to move some of the profits from cigarettes to smokeless alternatives.
Inger Schroll-Fleicher and the nicotine industry believe that the EU Commission is heading in the wrong direction.
"The tax structure is a way to incentivise adult smokers to switch from cigarettes to less harmful smokeless nicotine sources. This means that the tax on smokeless nicotine products should be significantly lower than on smoking tobacco, as the former is significantly less harmful to the individual user than the latter," she tells VapeTjek.
Denmark is pushing forward
The Danish government has long been working to tighten legislation on smoke-free nicotine products, including through higher taxes. In May, Denmark, along with several other countries, demanded that the European Commission act faster - which has now happened.
The proposal has now been sent out for consultation, and as chairman of the Council of Ministers, the Danish government wants responses from interested parties by 25 August.
