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The EU plans to classify e-cigarettes as tobacco products to raise more money

Um, okay guys, who’s going to tell the EU that e-cigarettes don’t contain tobacco?

Imagine for a second that we had a pill that gave people all the benefits that they can expect to see when they stop smoking. This single pill clears their lungs and massively reduces their risk of lung cancer. It cuts their chances of heart disease and stroke by roughly half. It even makes them financially better off! Surely we would want as many smokers as possible to have access to this new drug? Apparently not. Apparently instead of supporting our ‘wonder drug’ — the e-cigarette — the EU plans to tax it at the same rate as the product which is causing the health problems in the first place! The EU’s plans to raise taxes on e-cigarettes so that they are in line with tobacco products would mean that a £23 e-cigarette will cost £53 if taxed as a tobacco product, according to the International Business Times.

EU plans to classify e-cigarettes as tobacco products

What’s good for a country’s health isn’t always what’s good for a country’s economy

Cigarette companies found that they are actually a boost to a country’s economy because they cause plenty of premature deaths which means that a government doesn’t have to spend so much money looking after the elderly. And tobacco company executives wonder why everyone thinks that they’re the bad guys. We don’t even have to guess or put words in the mouths of EU ministers. A document from their meeting agenda explains that e-cigarettes are a “problem” because they mean “decreasing revenue” and “significant long term budget implications” for tax collectors. In other words, EU officials are worried that falling smoking rates (due to e-cigarettes) will mean that they can collect less taxes. Think about what this means. This means that EU officials think that falling smoking rates are a problem which they need to correct. It means that EU officials are content for smoking-related illness to claim more lives just so long as their coffers are topped up. It means that the 2.2 million people in the UK who use e-cigarettes as a substitute for smoking will be financially penalised for improving their health.

But such a change wouldn’t just be immoral, it would be illegal

By the EU’s own laws, they should not be able to tax e-cigarettes at the same rate as tobacco: ...the principle of equal treatment or non-discrimination requires that... different situations must not be treated in the same way (Case 304/01 Sept 2004 Spain v European Commission para 31). E-cigarettes are obviously different to tobacco products and therefore should be treated differently. E-cigarettes do not contain tobacco, do not contain tar, carbon monoxide, ammonia, hydrogen cyanide or thousands of other harmful chemicals found in cigarettes. E-cigarettes are not linked with heart disease, stroke, lung cancer, emphysema, peripheral arterial disease or a host of other smoking-related health problems. The newest generation of e-cigarettes, box mods, don’t even look like cigarettes.

What is the cigarette tax for?

The reason why we have a 57% additional duty on tobacco products and not other consumer products (some, like coffee, are also addictive) is to reflect the unique dangers of smoking — a habit that kills roughly half of its long-term users. But there is no evidence that e-cigarettes have any long-term negative health impact whatsoever. If this decision were being made to protect public health rather than ministerial finances, the tax on e-cigarettes would be proportional to the health risks of e-cigarettes versus tobacco products. The most comprehensive study on e-cigarettes to date, by Public Health England, finds that e-cigarettes are likely “95% less harmful than tobacco”. On the basis of this evidence, e-cigarettes could fairly be taxed at 5% of the rate of cigarettes. Actually, you could make a very strong case that e-cigarettes should receive a tax break because they are a viable alternative to an extremely damaging habit. The main similarity between e-cigarettes and cigarettes is the nicotine. But UK tax law already acknowledges that this doesn’t justify a similar tax system. In the UK, nicotine replacement therapy, such as gums, patches and sprays, attract a reduced VAT rate of 5%. You could very convincingly argue that chemically e-cigarettes more closely resemble nicotine sprays than they do any cigarette.

Taxing vaping is not a done deal

Despite what the tabloids have reported, this isn’t a done deal. A legislative proposal will come be prepared by the EU commission by 2017, and no proposal will come to the table without impact studies, public consultations and technical analyses. Brussels can’t be seen to be supporting tobacco products on the eve of Britain’s EU referendum so will likely be in no rush to get these done any time soon. And at least some EU officials are quoted as saying that it “makes no sense in terms of health policy” for e-cigarettes to be taxed at the same level as tobacco. This sets the scene for another intense lobbying battle. The tobacco product directive is already the most lobbied piece of legislation in the EU’s history, with pharmaceutical companies and tobacco companies ploughing millions into ensuring that the laws passed will make them as much money as possible.

What do you think? Should e-cigarettes be taxed at the same rate as tobacco products?

By Lenny