Tobacco taxes are also a large supply of revenue within the EU, with the sin tax bringing in around 70 billion euros in 2015. Based on this document, we estimate it’s now closer to 80 billion. In contrast to the USA, tobacco tax revenues have remained relatively steady despite declining numbers of smokers. But that’s because of huge tax increases instead of steady sales. In 2008 Europe brought in 101.42 Euros per 1000 cigarettes sold – by 2015 it was 152.44. (Source: World Bank.)
It’s challenging to get accurate figures of the amount of E Cig Reviews for the of Europe, but Reason.com estimates that by 2016 6 million vapers had used e-cigarettes to prevent smoking, while another 9 million had used vaping to reduce back. Recently, Japan Tobacco International estimated that there were approximately 40 million vapers in the world, with all the possible ways to grow to around 110 million by 2025. With Europe having around 30% of the total, that will equate to around 12 million vapers currently.
That’s still small when compared to variety of smokers in the EU. The population from the EU is around 512 million, and Europe estimates that around 26% of the population still smoke. That’s a tremendous 133 million people, who on average, based on the EU, are experiencing the average lack of life of 14 years.
Considering the fact that vapers are equivalent to around 9% in the total number of smokers, we might roughly estimate the reduction in tobacco revenue to be around 7.2 billion euros, with disclaimers as before (the lack of ability to account for dual vapers, for those who have quit both smoking and vaping and the reality that there are more vapers in countries rich in taxes on cigarettes.)
A quick mention here of healthcare. Health care is commonly excellent in the EU, so of course governments to have to fork out for the price of smoking diseases. But these are generally cheaper to deal with than old age diseases (lung cancer is a much faster killer than dementia). Smoking diseases also strike many smokers around about pensionable age, saving governments many billions in pension payments.
Obviously, we can’t determine these concerns influence the EU. But we are able to look at what the EU has been doing and said. For as long ago as 2013, MEPs were raising concerns about e cigarettes. Here’s what one MEP asked: “The intake of traditional cigarettes offers the Member States with sizeable revenues, because of the substantial taxes to which they may be subject… can the Council state what action it promises to take to address the differences in tax revenue materialising in State coffers following the proliferation of e cigarettes, which currently seem to be free from any type of duty?”
The EU commission proceeded to try and medicalise e-cigarettes (an effective ban, as during the time there were no e cigarettes with medical authorisation). Due partly to vigorous campaigning by vapers, this lead to the messy compromise this is the Tobacco Products Directive. Vaping has become restricted, but remains legal.
The EU also has held consultations on implementing vape specific taxes. I attended one of many consultations in the uk, and the EU representative actually posited tax as a positive factor for the vaping industry – on the basis which a standard EU vape tax could be a lot a lot better than draconian taxes imposed by individual countries. Another stance is recorded in EU documents, where they appear to estimate that by harmonising duties on e-cigs, tobacco tax losses might be limited to 2.5% of total tax revenue. (Source: EU Commission Report).
Up to now these initial attempts happen to be thwarted. But that could not always become the case, and several in the business think it’s only a matter of time before a vape tax is implemented. It doesn’t help that inside the EU there mwrnff 24 organisations pushing for tighter vape regulations.
Wonder where their funding is coming to finance lobbying the EU? According to International Vaping, in 2016 over 500 million euros of this originated from the EU. So essentially, the EU is paying anti-vape organisations to lobby itself for tighter rules on vaping.