European Union finance ministers agreed today to raise the minimum level of taxes applied on cigarettes across the bloc in a bid to cut smoking and reduce tobacco smuggling, dpa reported. As from January 1, 2014, the minimum excise rate will increase from 0.064 euros (0.1 dollars) per cigarette to 0.09 euros. The proportional minimum will accordingly be raised, from today"s 57 per cent to 60 per cent of the weighted average sales price. Ministers meeting in Brussels also agreed on a compromise allowing a transitional period, until January 1, 2018, for those EU member states that have not yet raised their existing minium rates. These are Bulgaria, Greece, Estonia, Latvia, Lithuania, Hungary, Poland and Romania. The rest of the member states will be allowed to limit the import of cigarettes from those countries to 300 per person. Cigarette prices currently vary widely across the 27-member bloc - from an average of 0.06 cents per cigarette (or 1.20 euros for a packet of 20) in Latvia to more than six times that amount in Britain. Such price differences largely reflect the level of excise duty applied by governments on tobacco products, and contribute to the smuggling of cigarettes from low-priced countries in Eastern Europe to high-priced countries in the West. The European Commission, which pushed through the proposals, estimates that up to 20 per cent of all cigarettes consumed in certain EU countries come from other member states where they are cheaper. The commission hopes that the rise in taxation will also help cut tobacco consumption.
