Study on Council Directive 2011/64/EU on the structure and rates of excise duty applied to manufactured tobacco : final report : volume I, main text

The purpose of this Study is to contribute to the Impact Assessment of a possible revision of Council Directive 2011/64/EU on the structure and rates of excise duty applied to manufactured tobacco. The Study includes a baseline assessment of a series of issues emerged from the previous evaluation of the Directive and analyses how these problems may evolve if no EU action is taken. Secondly, the Study formulates a set of possible policy options to address these problems, assesses their likely impacts (market functioning and development, regulatory costs, tax revenues, tobacco control policies, illicit trade etc.), and compares the outcome with the baseline situation. The main issues analysed in this Study includes: the EU-level harmonisation of the tax treatment of electronic cigarettes and heated tobacco products, the inclusion of raw tobacco in the EU excise system, the tax-induced substitution between cigarettes and fine cut tobacco or low-price cigarillos, the illicit trade of water-pipe tobacco, and the different interpretation of the rules on the 'minimum excise duty' on cigarettes across Member States. The underlying evidence is based on a vast stakeholders interview programme, the results of an open public consultation, extensive desk research and the best market database available.