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Promoting convergence and closing gaps: a blueprint for the revision of the European Union Tobacco Tax Directive

BACKGROUND AND AIMS: Despite the European Union (EU) Tobacco Tax Directive (TTD), a lack of convergence in EU tobacco prices promotes high levels of cross-border shopping and down-trading from factory-made (FM) to roll-your-own tobacco (RYO) cigarettes. This study presents a blueprint for reform, wh...

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Autores principales: López-Nicolás, Ángel, Branston, J Robert
Formato: Online Artículo Texto
Lenguaje:English
Publicado: BMJ Publishing Group 2023
Materias:
Acceso en línea:https://www.ncbi.nlm.nih.gov/pmc/articles/PMC9763168/
https://www.ncbi.nlm.nih.gov/pubmed/34031225
http://dx.doi.org/10.1136/tobaccocontrol-2021-056496
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author López-Nicolás, Ángel
Branston, J Robert
author_facet López-Nicolás, Ángel
Branston, J Robert
author_sort López-Nicolás, Ángel
collection PubMed
description BACKGROUND AND AIMS: Despite the European Union (EU) Tobacco Tax Directive (TTD), a lack of convergence in EU tobacco prices promotes high levels of cross-border shopping and down-trading from factory-made (FM) to roll-your-own tobacco (RYO) cigarettes. This study presents a blueprint for reform, whereby minimum taxes are related to the overall price level in the EU and where taxation of RYO is related to that of FM. METHODS: Longitudinal data on prices and taxes on FM and RYO in 25 member states over 2011–2019 are used to estimate econometric models for their weighted average prices as a function of taxes. Two scenarios are simulated with the models’ estimates: a baseline scenario for the actual tax stance pertaining to 2020 and a reform scenario implementing the blueprint. RESULTS: The baseline results show that, while the prices of both products have experienced a slight increase since 2016 in real terms, the dispersion in the prices of FM across countries has increased and the difference in the prices of RYO within countries has widened. The results for the reform scenario show dispersion would diminish both EU-wide and in hotspots for cross-border sales of FM. The reform would also lead to a substantial reduction in the price gap between FM and RYO. CONCLUSION: To promote price convergence and close the price gap between FM and RYO, the revised TTD should ensure minimum FM taxes track a measure of their average EU price, and RYO taxes are related to FM taxes.
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spelling pubmed-97631682022-12-21 Promoting convergence and closing gaps: a blueprint for the revision of the European Union Tobacco Tax Directive López-Nicolás, Ángel Branston, J Robert Tob Control Original Research BACKGROUND AND AIMS: Despite the European Union (EU) Tobacco Tax Directive (TTD), a lack of convergence in EU tobacco prices promotes high levels of cross-border shopping and down-trading from factory-made (FM) to roll-your-own tobacco (RYO) cigarettes. This study presents a blueprint for reform, whereby minimum taxes are related to the overall price level in the EU and where taxation of RYO is related to that of FM. METHODS: Longitudinal data on prices and taxes on FM and RYO in 25 member states over 2011–2019 are used to estimate econometric models for their weighted average prices as a function of taxes. Two scenarios are simulated with the models’ estimates: a baseline scenario for the actual tax stance pertaining to 2020 and a reform scenario implementing the blueprint. RESULTS: The baseline results show that, while the prices of both products have experienced a slight increase since 2016 in real terms, the dispersion in the prices of FM across countries has increased and the difference in the prices of RYO within countries has widened. The results for the reform scenario show dispersion would diminish both EU-wide and in hotspots for cross-border sales of FM. The reform would also lead to a substantial reduction in the price gap between FM and RYO. CONCLUSION: To promote price convergence and close the price gap between FM and RYO, the revised TTD should ensure minimum FM taxes track a measure of their average EU price, and RYO taxes are related to FM taxes. BMJ Publishing Group 2023-01 2021-05-24 /pmc/articles/PMC9763168/ /pubmed/34031225 http://dx.doi.org/10.1136/tobaccocontrol-2021-056496 Text en © Author(s) (or their employer(s)) 2023. Re-use permitted under CC BY-NC. No commercial re-use. See rights and permissions. Published by BMJ. https://creativecommons.org/licenses/by-nc/4.0/This is an open access article distributed in accordance with the Creative Commons Attribution Non Commercial (CC BY-NC 4.0) license, which permits others to distribute, remix, adapt, build upon this work non-commercially, and license their derivative works on different terms, provided the original work is properly cited, appropriate credit is given, any changes made indicated, and the use is non-commercial. See: http://creativecommons.org/licenses/by-nc/4.0/ (https://creativecommons.org/licenses/by-nc/4.0/) .
spellingShingle Original Research
López-Nicolás, Ángel
Branston, J Robert
Promoting convergence and closing gaps: a blueprint for the revision of the European Union Tobacco Tax Directive
title Promoting convergence and closing gaps: a blueprint for the revision of the European Union Tobacco Tax Directive
title_full Promoting convergence and closing gaps: a blueprint for the revision of the European Union Tobacco Tax Directive
title_fullStr Promoting convergence and closing gaps: a blueprint for the revision of the European Union Tobacco Tax Directive
title_full_unstemmed Promoting convergence and closing gaps: a blueprint for the revision of the European Union Tobacco Tax Directive
title_short Promoting convergence and closing gaps: a blueprint for the revision of the European Union Tobacco Tax Directive
title_sort promoting convergence and closing gaps: a blueprint for the revision of the european union tobacco tax directive
topic Original Research
url https://www.ncbi.nlm.nih.gov/pmc/articles/PMC9763168/
https://www.ncbi.nlm.nih.gov/pubmed/34031225
http://dx.doi.org/10.1136/tobaccocontrol-2021-056496
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