Netherlands Urged to Reverse Tax Hike

A Dutch lawmaker wants to reverse a recent increase in tobacco excise duties to boost government revenue, reports The NL Times.

On April 1, the Netherlands increased the excise duty per pack of 20 cigarettes from €5.85 to €7.81. A pack now costs more than €11. However, revenues from the measure have fallen short of expectations. Recent figures from the Ministry of Finance reveal that the tax increase will raise €550 million less than anticipated.

Research by the RIVM showed that around 10 percent of smokers quit because of the more expensive cigarettes. The researchers also noted that the share of cigarettes from abroad increased from 24-28 percent to 35-39 percent.

Concerned about the Netherland’s lower tax take, BBB parliamentarian Henk Vermeer urged the government to undo the measure, arguing that it would be “stealing from the treasury” if it failed to do so. According to the BBB, people crossing the border to buy their cigarettes likely do their other shopping there too. “That also means less revenue from VAT and corporate tax,” Vermeer said.

Antismoking groups vehemently oppose Vermeer’s proposal, arguing that the purpose of the excise increase was not to raise money, but to discourage people from smoking.

 “Making cigarettes more expensive is very important and works,” KWF Kankerbestrijding Director Caral van Gils was quoted as saying. “There is more than enough scientific evidence for that.”