Council Directive 2011/64/EU sets out EU rules on the structure and rates of excise duty applied to manufactured tobacco. The Directive defines and classifies various manufactured tobacco products according to their characteristics and lays down the relevant minimum rates of excise duty for the different types of products. The purpose of the Directive is to ensure the proper functioning of the internal market and a high level of health protection.
Every four years, the European Commission is required to submit a report to the Council on the rates and the structure of excise duties, accompanied – where appropriate – by a proposal for the revision of the Directive. The latest report was prepared by the Commission on 10 February 2020 and on 2 June 2020 the Council approved conclusions setting out its priorities in relation to the review of the Directive. A public consultation, open between 30 March 2021 and 22 June 2021, sought to ensure that all relevant stakeholders had an opportunity to express their views on the current rules and on possible changes to these rules. The Commission is expected to bring forward a new legislative proposal later this year or early in 2022 and the impact of this can be assessed when the proposal is available.
The Commission Report and the Council conclude that it is necessary to upgrade the EU regulatory framework, in order to tackle current and future challenges in respect of the functioning of the internal market by harmonising definitions and tax treatment of novel products (such as liquids for e-cigarettes and heated tobacco products), including products that substitute tobacco, in order to avoid legal uncertainty and regulatory disparities in the EU. Revision can also address the issue of tax-induced substitution across products and enable further measures to combat the illicit trade in tobacco to address tax control, revenue collection and health protection issues.
Ireland welcomes the review of the Directive to ensure that the rules remain fit for purpose, safeguard the proper functioning of the internal market and, very importantly, provide for a high level of health protection. This latter point is particularly significant in the context of the plan in the Programme for Government to introduce a targeted taxation regime to specifically discourage ‘vaping’ and e-cigarettes as well as in the European Action Plan against Cancer and our own national policy, Tobacco Free Ireland, both of which recognise that taxation plays a pivotal role in reducing tobacco consumption, in particular in deterring youth from smoking.
Ireland is committed to a policy of high taxation of tobacco to encourage people to quit smoking. Government health and social policy has focused on the further denormalisation of smoking generally as consumption of tobacco products remains one of the greatest avoidable and preventable health risks in our society. Similar considerations arise in respect of e-cigarette products and other alternative products.
