[ad_1]
The Dutch government’s tobacco tax hikes no longer increase state revenue, largely due to cross-border cigarette purchases, according to a Ministry of Finance report published on Prinsjesdag.
Previously, the ministry expected that a 5-cent tax increase per pack would add 7 million euros to the treasury. That amount is now projected at zero.
“At the current level of tobacco excise, further increases are expected to trigger strong behavioral changes that will fully offset any extra revenue,” the ministry wrote.
A spokesperson for State Secretary Eugène Heijnen explained the effect: “Reduced smoking and cross-border purchases substantially lower the number of cigarettes sold, with cross-border buying likely the largest factor.”
This year, the Ministry of Finance expects to collect 2.5 billion euros in tobacco taxes, the same as next year. The excise per pack currently stands at 7.81 euros, and no further hikes are planned.
According to RTL, customs data support the claim. Analysis of cigarette packs found last year showed that 45 percent lacked a Dutch excise stamp, up from 15 percent in 2021 and 25 percent in 2023. Most of these packs were purchased abroad, where taxes are lower, and over 10 percent were counterfeit.
The tax hikes, however, have affected public health. The RIVM estimates that 7 percent of smokers quit following the last increase, while 22 percent cut back, with about two-thirds citing the tax as a factor.
[ad_2]
Source link