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Implications of the taxation of tobacco in the European Union in the period 2005-2014

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  • Dinka Antic

    (Governing Board of Indirect Taxation Authority of Bosnia and Herzegovina, Banjaluka, Bosnia and Herzegovina)

Abstract

The paper aims to analyze the implications of excise policy in member states and at the EU level in the period 2005-2014 in the field of tobacco taxation for policy convergence, revenues and the tobacco market. Based on statistical measures of variability, the convergence of the excise policies of EU member states in the field of the taxation of cigarettes is determined, with the proviso that the excise policies of the new member states are more homogenous than those of the EU-15. From trends in the consumption of tobacco products it can be concluded that the policy that was based on the premise of increasing the excise burden on cigarettes while maintaining a low excise duty on fine cut tobacco led in most member states to distortions in the tobacco market and loss of excise revenues. The study presented in this paper confirmed the key hypothesis that a coherent and effective excise policy at EU level cannot be achieved without careful balancing the structure, amount and dynamics of the increase in the tax burden on cigarettes and all products that may appear as their substitutes.

Suggested Citation

  • Dinka Antic, 2015. "Implications of the taxation of tobacco in the European Union in the period 2005-2014," Financial Theory and Practice, Institute of Public Finance, vol. 39(3), pages 279-304.
    • Handle: RePEc:ipf:finteo:v:39:y:2015:i:3:p:279-304
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    References listed on IDEAS

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    1. Sijbren Cnossen, 2006. "Tobacco taxation in the European Union," CPB Discussion Paper 67, CPB Netherlands Bureau for Economic Policy Analysis.
    2. Jha, Prabhat & Chaloupka, Frank (ed.), 2000. "Tobacco Control in Developing Countries," OUP Catalogue, Oxford University Press, number 9780192632463.
    3. Ben Lockwood & Giuseppe Migali, 2009. "Did The Single Market Cause Competition in Excise Taxes? Evidence From EU Countries," Economic Journal, Royal Economic Society, vol. 119(536), pages 406-429, March.
    4. Ramboll, 2014. "Study on the measuring and reducing of administrative costs for economic operators and tax authorities and obtaining in parallel a higher level of compliance and security in imposing excise duties on ," Taxation Studies 0048, Directorate General Taxation and Customs Union, European Commission.
    5. Sijbren Cnossen, 2006. "Tobacco Taxation in the European Union," FinanzArchiv: Public Finance Analysis, Mohr Siebeck, Tübingen, vol. 62(2), pages 305-322, June.
    6. Sijbren Cnossen, 2006. "Tobacco Taxation in the European Union," CESifo Working Paper Series 1718, CESifo.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    tobacco taxation; convergence;

    JEL classification:

    • H2 - Public Economics - - Taxation, Subsidies, and Revenue

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