EU attacks smoke tax, cigarette smuggling

(BRUSSELS) - The European Commission unveiled on Wednesday steps to tighten taxes on cigarettes and tobacco across the EU, in an effort to encourage people to stop smoking and combat smuggling.

Under the plan, the minimum tobacco tax level for cigarettes and fine cut tobacco in the 27 EU nations would gradually increase over the next six years to 63 percent of the price on average from 57 percent currently.

The definition of tobaccos type would also be tightened, so that manufacturers can no longer exploit loopholes enabling them to sell certain cigarettes and tobacco as cigars or pipe tobacco, which benefit from lower taxes.

"Today's proposal supports the EU policy to reduce tobacco consumption and narrow the differences in price levels of tobacco products within the EU," said EU Tax Commissioner Laszlo Kovacs.

"It will help reduce cross-border shopping and tackling illicit trade," he said, by narrowing the differences between tax levels in EU countries.

The commission said the proposal aims to help reduce tobacco consumption by 10 percent within the next five years. It would create a more level playing field for manufacturers and give nations more flexibility to set minimum taxes.