UK in top three for EU ‘sin taxes’

The UK, along with Ireland and Finland, tops the European league table for ‘lifestyle regulations’, including heavy taxes on alcohol, soft drinks, e-cigarettes, food, and tobacco, according to research by the European Policy Information Centre (EPICENTER)

The think-tanks’ Nanny State Index 2017 suggests that over the last year, most EU members have become more keen on so-called ‘sin taxes’, with all but six countries scored as worse than previously. The Czech Republic and Germany are the most liberal EU member states.

The report states: ‘There is no change at the top, with Finland enjoying a seemingly impregnable lead as the EU’s number one nanny state thanks to draconian restrictions in all four product categories, but the UK and Ireland are not far behind, saved only by their more liberal approach to vaping.’

The research suggests vapers have been particularly badly hit by changes in taxation. The previous year’s index found only one country which taxed e-cigarette fluid, but that number has now risen to six. EPICENTER says that seems likely to rise further as governments scramble for money to offset falling tobacco revenues.

Greece, Slovenia, Romania, Latvia and Hungary all introduced new e-cigarette taxes in 2016. Thus, e-cigarette tax rates now range from €0.01 per ml in Latvia to €0.60 per ml in Portugal.

EPICENTER also reports a number of countries are seeking to join Hungary, Finland and France in putting a ‘sin tax’ on sugary drinks. Belgium has already done so, with Ireland and the UK set to join them next year. Greece has introduced a tax on wine for the first time.

On the plus side, the report notes Finland abolished its tax on confectionery, chocolate and ice cream in January 2017 while last year, the Czech Republic’s finance minister pledged to halve VAT on draft beer (this has not yet happened) and, in Bulgaria, a proposed tax on fast food and energy drinks was rejected by the finance minister.

EPICENTER researchers argue that, contrary to conventional wisdom, tax-based lifestyle policies create a number of problems and costs, while often failing to achieve their stated goal of making the public healthier. It says such sin taxes are regressive and fall most heavily on the poor.

EPICENTER’s Nanny State Index 2017 is here.

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