A change to tobacco taxation methods in the EU could help to discourage smoking, according to new research from the University of Bath.
Building on previous research showing how introducing additional tax requirements would close the pricing gap between roll-your-own and factory-made cigarettes, this latest research published in Tobacco Control uses modelling to demonstrate the effect of linking a minimum tax threshold for tobacco products to mean household spending power in each EU country. Such a move would serve to balance up pricing across different countries in the EU, and ensure that even in relatively wealthy countries, pricing levels of both factory-made and roll-your-own cigarettes would be sufficient to put off consumers.
Lead author Dr Rob Branston, an economist in the University of Bath’s School of Management, and a member of the Tobacco Control Research Group, explains: “Reform of the Tobacco Tax Directive (TTD), which governs the taxation of tobacco products in EU countries, is currently being considered by the European Commission. Tobacco prices vary widely across EU member states, and research suggests that in the face of tax and therefore price rises, consumers are turning to roll-your-own tobacco in place of factory-made cigarettes, rather than reducing or giving up smoking altogether."
"A revised TTD that leads to tobacco price increases in all member states would be beneficial to public health, as we know that affordability is an important determinant of tobacco consumption. We suggest that if a reformed TTD linked minimum taxes to typical household spending power, tobacco taxation would keep pace with national income growth, and taxation in relatively wealthy countries would be high enough relative to average consumer income levels to deter tobacco use.”