TobaccoReporter logo

Tag: tax increase

  • EU to Tighten Cross-Border Tobacco, Alcohol Limits?

    EU to Tighten Cross-Border Tobacco, Alcohol Limits?

    Several EU member states have proposed tightening single-market rules on the personal import of tobacco products, as part of discussions on revising the Tobacco Taxation Directive (TED), according to Euractiv. Denmark, which holds the EU Council presidency, floated the idea in early December, suggesting stricter limits on cross-border tobacco imports under Article 32 of the Excise Duty Directive, alongside more moderate tax increases. The move aims to curb cross-border shopping that undermines high-tax anti-smoking policies in countries such as France.

    Currently, individuals can import up to 800 cigarettes for personal use. A number of countries, including France, Germany, Finland, and Estonia, have expressed openness to lowering this threshold, with some also supporting limits on alternative tobacco products like heated tobacco.

    The European Commission has been cautious, indicating that changes to Article 32 may fall outside the scope of the TED. Some member states have also noted that the rules apply to alcohol as well, prompting calls from countries such as Finland, Estonia, and Germany to extend any revisions to alcoholic beverages.

  • Malaysian Health Ministry Proposes Vape Liquid Tax Increase

    Malaysian Health Ministry Proposes Vape Liquid Tax Increase

    The Malaysian Ministry of Health (MOH) has proposed an increase in excise duty on vape liquids ahead of the government’s plan to ban electronic cigarettes and vaping products completely. The excise tax would be set at MYR4 ($0.94) per mL, a tenfold increase, according to The Edge Malaysia.

    The proposal was submitted to the Ministry of Finance (MOF) for consideration, days before the 2026 budget is set to be tabled.

    “This is the ministry’s recommendation to the MOF for review and approval,” said Deputy Health Minister Lukanisman Awang Sauni during a question and answer session. The deputy minister explained that a standard pack of 20 cigarettes is equivalent to 200 puffs and taxed at MYR8 per pack, while 1 mL of vape liquid is equivalent to 100 puffs but taxed at 40 sen per milliliter (for nicotine and non-nicotine liquids). This means vapers pay significantly less tax per milligram of nicotine than cigarette smokers, he said.

    “Currently, one pack of cigarettes equals about 2 mL of vape liquid, but the tax on vape nicotine is only around 10% of cigarette tax. This disparity creates a large price gap,” said Datuk Wan Saifulruddin Wan Jan, who argued that the price gap encourages smokers to vape rather than quit altogether.

    The proposal is facing pushback from the industry, however.

    “A single-fold tax hike is already drastic in many ways. A tenfold is just sweeping the real issue under the rug,” said Ridhwan Rosli, Malaysian Vape Chamber of Commerce (MVCC) secretary-general. “It seems like they are changing their policy every year while the previous policy is just about to take place.”

    Ridhwan stated that the industry is proposing a maximum tax rate of 80 sen per milliliter.

    “As currently we are faced with a lot of new costs when it comes to going through the legal process of registration, etc., it is sad that the legal industry players are being punished for the wrongs of illicit products,” he said. There are worries that the drastic tax increase will increase illicit trade as well.

    Additionally, the government plans a full ban on e-cigarettes and vapor products.

    “The Health Ministry is now moving toward a full ban on e-cigarettes and vape products,” said Lukanisman. “The proposal will be tabled to the Cabinet this year for policy endorsement. The prohibition will be implemented in phases through enforcement, education, and community support.”

  • Maine Jacks Cigarette, Cigar Taxes for 2026

    Maine Jacks Cigarette, Cigar Taxes for 2026

    As part of a newly signed budget bill, Maine will raise its cigarette taxes from $2 to $3.50 per pack, increase the taxes on cigars from 43% to 75% of the wholesale price, and boost taxes on smokeless and chewing tobacco. It also includes a provision to automatically adjust other tobacco product taxes in line with future cigarette tax increases.

    Governor Janet Mills championed the tax hikes in her 2025–2026 budget proposal, citing public health concerns and the state’s high smoking rates. Maine hasn’t increased cigarette taxes since 2005 and currently has the lowest rate in New England. This change will place Maine among the top states nationally for tobacco taxation, tying New York and Alaska for the sixth-highest rate and trailing only Utah in retail cigar prices due to its 86% uncapped rate. The new taxes begin January 5, 2026.

    According to Halfwheel, the tax hike means that a cigar with a manufacturer’s suggested retail price of $9.50 could see its tax increase from $2.04 to $3.56. A cigar priced at $16 would see its tax jump from $3.44 to around $6.

  • Study: 60% Tax Hike Would Lower Smoking, Raise Revenue in Uruguay 

    Study: 60% Tax Hike Would Lower Smoking, Raise Revenue in Uruguay 

    In Montevideo, Uruguay, a Universidad de la República (Udelaar) study projected that a 60% increase in cigarette taxes from 2025 to 2028 would reduce smoking by 19% (49,000 people) and yet increase tax revenue by 24%. The research, led by Patricia Triunfo and Zuleika Ferre, analyzed data from 1997 to 2022, confirming that Uruguay’s anti-smoking policies since 2010 have significantly lowered consumption.

    The study highlights a price elasticity of -0.47, indicating tax hikes effectively reduce demand. Smoking accounts for 15% of adult deaths in Uruguay, 16.7% of health expenditure, and 50% of smokers die prematurely.

     “Evaluating public policies is a challenge because of how they are implemented, sometimes in simultaneous layers,” said Triunfo. “The big drama is to demonstrate causality between policies and reduction of smoking.”

    The study used aggregate data on legal cigarette sales, combined with variables such as prices, income, and regulations. Their work included collaborations with Jeffrey Harris of the Massachusetts Institute of Technology (MIT) and funding from the Bloomberg Foundation.