Tobacco Taxation in the European Union

21 Pages Posted: 31 May 2006

See all articles by Sijbren Cnossen

Sijbren Cnossen

University of Maastricht - Department of Economics; CESifo (Center for Economic Studies and Ifo Institute)

Date Written: May 2006

Abstract

Later this year, the European Commission has to submit a report to the Council of Ministers and the European Parliament with its views on tobacco tax policy in the EU. A 2004 publication issued by the Commission expressed the beliefs that tobacco consumption should be controlled by increasing tobacco excises and that harmonization should proceed on the basis of specific rates. This article reviews and evaluates EU tobacco tax policies. It supports the move towards specific taxation, but notes that there are conceptual and empirical limits to excessively high tobacco taxes. Smokers appear to pay their way and cigarette smuggling is a growing menace to health and revenue objectives.

Keywords: tobacco taxation, European Union

JEL Classification: H2, H8

Suggested Citation

Cnossen, Sijbren, Tobacco Taxation in the European Union (May 2006). CESifo Working Paper Series No. 1718, Available at SSRN: https://ssrn.com/abstract=905502 or http://dx.doi.org/10.2139/ssrn.905502

Sijbren Cnossen (Contact Author)

University of Maastricht - Department of Economics ( email )

P.O. Box 616
Maastricht, 6200 MD
Netherlands

CESifo (Center for Economic Studies and Ifo Institute)

Poschinger Str. 5
Munich, DE-81679
Germany

HOME PAGE: http://www.CESifo.de

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