Cheap Cigarettes to Become a Thing of the Past: EU

The days of taxed-to-the-hilt smokers bulk-buying cigarettes in cheap eastern European countries could be numbered following an agreement between European Union finance ministers on Tuesday.

Smokers in a many northern and western European countries have long complained of relatively high prices for their tobacco fix, in some cases such as Britain nearly doubled once excise rates are added in.

That in turn has triggered huge legal and black-market overseas trade amid an explosion in budget travel over the past decade.

However, ministers finally brokered a compromise deal in Brussels that will see minimum excise rates increased across the 27 EU member states by January 1, 2014, from 64 euros (96 dollars) per 1,000 cigarettes to 90 euros.

The minimum rate for top-sliced tax on cigarettes, the government take usually funnelled into national health expenditure, will also rise from 57 percent of the weighted average sales price in each market to 60 percent.

A transitional period will apply for countries that have only recently or yet to raise prices to those rates.

That means smokers will still have access to cheap smokes until 1 January, 2018, in Bulgaria, Estonia, Greece, Hungary, Latvia, Lithuania, Poland and Romania.

Advertisement

However, the number of cigarettes that travellers can bring back to the likes of Sweden, which pushed hard for the deal as rotating EU presidency holder, may also be restricted to as few as 300 on any one trip to countries applying transitions.

Duties on rolling tobacco will also rise on a sliding scale over the next decade.

Advertisement

Source-AFP
SRM