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European Union calls for tobacco tax hike

The European Union unveiled plans for a tobacco tax hike Wednesday to try to persuade smokers to quit. The plan to harmonize taxes across the 27-nation bloc would hit eastern European smokers hardest where taxes are much lower than in countries such as Britain. A pack of 20 Cigarettes costs on average 8.12 euros ($13) in Britain, nearly seven times More than the 1.19 euros ($1.90) price tag in one of the EU's poorest nations, Latvia. Higher prices would reduce cigarette use by a tenth over the next five years and cut down on tobacco smuggling and health problems, the EU said. Regulators want tax to amount to 63 percent of the retail price of all Cigarettes across the European Union by 2014 instead of the current average of 57 percent. The tax must amount to at least 90 euros ($144) from the sale of 1,000 Cigarettes instead of 64 euros ($102) at present. That would see cigarette prices in Poland increase by nearly a half although there would be no change to prices in Britain, France, Germany and Ireland where tobacco taxes are already high. It should also stop the illegal practice of people buying tobacco in another EU country to sell at home. Shoppers can buy tobacco abroad for their own use. The EU says 13 percent of tobacco sold in Europe is bought in one nation and used in another. The European Commission proposal will need the backing of EU governments and the European Parliament before it could be adopted by the end of 2009 at the earliest.