NEWS
1
YEAR'S
GRACE
VA P E R S A N D VA P E C O M PA N I E S
B R E AT H E A S I G H O F R E L I E F A S
THE EU DELAYS AN UNPOPULAR TAX
After a long, arduous process of nervous speculation
and preparation for the worst, vape companies in
the EU are enjoying something of a reprieve, as the
European Union has elected to withhold a new excise
on vaping products.
A January 10 report titled “Report from the Commission
to the Council on Directive 2011/64/EU on the structure
and rates of excise duty applied to manufactured
tobacco, ” provided the good news. In the eight-page
document, the European Commission revealed that
there has been no settled proposal on how a new tax
can be formed and imposed, with the main reason
being a lack of available, conclusive information on
e-cigarettes.
“The main reasons are the lack of data necessary
to underpin a proposal for harmonised taxation of
e-cigarettes and the fact that some issues identified
in the evaluation of 2014 have since been solved at
national level or have been settled.”
The delay also excludes heat-not-burn tobacco
products from further taxation, though this was mainly
due to a relative lack of heat-not-burn users (fewer
than half a million).
The delay is a relief, but not a permanent one for the
European vape industry and its trading partners. With
more precious time on the table, another opportunity
for organising and lobbying has arisen, and certain
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trade bodies are rising to the challenge. They have a
year to make all the difference they can.
“The question whether there is a need to propose a
harmonised explicit category for e-cigarettes and
heat-not-burn tobacco products will be re-considered
in the context of the next REFIT evaluation and report
on the directive due in 2019.”
Despite this roadblock, the Commission is still
committed to enforcing a minimum excise duty on
combustible cigarettes which will likely contribute to
their continued decline. Vaping will, however, remain
under evaluation and it is reasonable to expect a
definite step to be taken in 2019:
“The REFIT evaluation will cover the outstanding
issues which the external study could not conclude
on including e-cigarettes and heat-not-burn tobacco
products. It is expected that more information will
become available from, among other sources, the
reporting obligation under article 20 of the Tobacco
Products Directive. The Commission will therefore
continue to monitor the developments related to
e-cigarettes and heat-not-burn tobacco products.”
The full report can be accessed at ec.europa.eu.
For further details on the difficult and often stalling
process of drafting and imposing an appropriate excise
tax for vaping, see our feature interview with IBVTA
Chairman Fraser Cropper.