TAE on the occasion of the WHO meeting in Moscow: Not nullify tax competition and keep the tax burden low!
To our concern, the European Union (EU) and the World Health Organization (WHO) attempt to establish uniform excise taxes on products such as sugary drinks, tobacco and alcohol. This would represent a dangerous precedent, and such excise taxes could easily be extended to all other consumer products, taxpayers’ president Rolf von Hohenhau says.
Taxpayers Association of Europe (TAE) supports individual tax autonomy and opposes any regional or international tax changes that include harmonizing tax rates or introducing new taxes.
The WHO will meet in Moscow, Russia on October 13-18, 2014 to discuss again raising excise taxes and recommend uniform excise tax rates.
For these reasons, TAE is among the promoters of an international coalition letter supported by 22 taxpayer groups representing 15 different countries. The coalition letter (released today October 10, 2014) aims to promote tax competition and criticize financial transactions tax and excise taxes.
Link to the international coalition letter
Regarding tobacco, the draft guidelines for the meeting state that tobacco excise taxes should account for at least 70 percent of the retail prices. It is not clear if the target value of 70 percent includes both excise tax and value-added tax. From the point of view of TAE there is no universally optimal level of excise taxes and hence no of tobacco tax excise tax. Implementing an universal 70 percent excise incidence could result in significant increases in cigarette prices in many countries which would drive consumers to purchase illicit tobacco products. Therefore, we encourage the EU Member States to incorporate an appropriate supplementary wording into their position or delete the 70 percent remark completely.
Rolf von Hohenhau: “These international threats to tax sovereignty are expanding. Attempts at establishing international tax regimes would expand the reach of the EU and the WHO and would jeopardize member states’ tax sovereignty which has always been a key competence of national parliaments.”
Moreover, any price increase through a harmonized tax regime happens to disproportionately hurt lower income people as the cost of consumer products would increase.
Munich, October 10, 2014