Taxing tobacco in the European union

The health effects of smoking and the various tobacco control measures used by goverments, including taxation, are very much in the news these days. An important smoking gun is the recent publication of a joint study (Jha and Chaloupka, 2000) by the World Bank and the World Health Organization on the economic aspects of tobacco use. Focusing in particular on developing countries, the WB/WHO study advocates the following measures to curtail tobacco consumption: higher taxes, comprehensive bans on the promotion and advertising of tobacco products, better and more widely publicized research into the consequences of smoking, prominent warning labels, deregulated access to nicotine replacement therapies, and tight controls on smuggling. In the study’s wake, the WHO is promoting the adoption of a world-wide treaty to control tobacco at a conference to be held in 2002.

This paper focuses on the tax aspect of tobacco control measures with particular reference to the European Union.