Denmark Tax Plan Heated Tobacco Increase 132% Nicotine Pouches 1000%

EU discussed the revised version of the Tobacco Consumption Tax Directive proposed by Denmark: heated tobacco raised by 132%, nicotine pouches increase to 1000%

On December 4th, the European Union discussed the revised version of the Tobacco Consumption Tax Directive proposed by Denmark. The proposal further increases the tax on all tobacco and nicotine products, with the tax on heated tobacco increasing by 132% compared to the previous draft, and the tax on nicotine pouches possibly increasing to 1000%. Many countries have previously opposed the EU’s practice of centralizing new taxes and warned that this could impact supply chains and stimulate illegal trade.

Quick overview of key points

The EU will review Denmark’s proposal for stricter tobacco tax reform.
The heated tobacco tax is planned to increase by 132%, and the nicotine pouches tax may increase by 1000%.
92% of public consultations oppose a comprehensive tax increase.
The tax rate for innovative smokeless products is higher than that of some traditional smokeless tobacco.
Many countries are concerned about the concentration of new taxes in the European Union and their impact on market order.

The tax burden on heated tobacco and nicotine pouches has significantly increased

In the new proposal, the tax rate for heated tobacco will increase by 132% on the basis of the original draft, and the tax rate for nicotine pouches can increase by up to 1000%. The minimum tax rate for innovative smokeless products will reach 360 euros per kilogram, higher than the 215 euros for traditional smokeless tobacco.
In the previous public consultation, 92% of the 17000 participants opposed the overall tax increase, citing reasons such as employment impact, increased consumer burden, and increased smuggling risks, but the revision is still being pushed forward.

Multiple countries are concerned that additional taxes will be managed by the European Union and could impact industry development

Italy, Greece, Sweden, Bulgaria and other countries have repeatedly opposed the centralized management of new taxes by the European Union. It is estimated that this portion of revenue may reach 15 billion euros.
The report points out that excessive tax burden may put pressure on the tobacco supply chain, innovation investment, and employment, and may drive consumers towards the illegal market. Some experts are concerned that treating low-risk products equally with combustible tobacco may hinder the industry’s innovation process in reducing harm.

Reference: Cigarettes, increases of up to EUR 2 per pack under the Danish proposal – Il Sole 24 ORE

Why is Denmark pushing for such a high tax plan

1. Update outdated rules to cope with new products
Because the original Tobacco Exemption Tax Directive was formulated in 2010. But since then, a large number of new tobacco/nicotine products have emerged in the market, such as electronic cigarettes, heated tobacco, nicotine bags, etc. According to the official explanation, this revision aims to unify traditional tobacco and new products into the scope of taxation.
2. Prevent tax rate evasion, unfair competition, and tax evasion
The revision is also aimed at “closing loopholes”, such as implementing stricter controls on “raw tobacco” and incorporating it into the Electronic Monitoring System (EMCS) to prevent it from being diverted into illegal supply chains.
3. Fiscal considerations – creating new revenue for the EU budget
4. Responding to the strong call of anti tobacco/tobacco control NGOs
5. Promote public health goals

The above report was edited by the Dank Smoke World View team. It only represents our unilateral viewpoint. We are a professional China vape manufacturer.