Inflation: In Luxembourg, everything is becoming more expensive except tobacco
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InflationIn Luxembourg, everything becomes more expensive except tobacco
LUXEMBOURG – While inflation is emerging as the major political issue in Luxembourg, tobacco escapes higher taxation. A government choice that is difficult to justify…
UN inflation rate annual at 7%, +12.5% for fresh fruits and vegetables or even +22% for postal services. Examples of price explosions abound in the Grand Duchy, where the high cost of living has become a major political issue. Everything is increasing… except tobacco, which is at a largely affordable price compared to neighboring countries.
Admittedly, the Marlboro package took 20 cents two weeks ago to settle at around 5.50 euros, according to the service stations surveyed, but not all brands are affected by the increase. An increase which remains very reasonable and which is only due to the producer part, in a context of inflation of the prices of raw materials.
The difficult position of the Ministry of Health
Regarding taxation, nothing changes in substance: “The same tax burden on tobacco products will be maintained, from January 1, 2023”, explains to The essential the Ministry of Finance, while conceding “an increase in excise duties to compensate for the reduction in VAT”. The price of tobacco which is falling taking advantage of the measures for the purchasing power of the last tripartite would have looked bad…
Still, a pack of 20 cigarettes at around 5.5 euros compared to almost 8 euros in Germany and Belgium and soon 11 euros in France is an anomaly in a country with a higher standard of living like the Grand Duchy. Asked about this tax indulgence, the Ministry of Health proposed a balancing act referring to “the competence of the Ministry of Finance” while advancing recommendations in terms of public health.
“The WHO estimates that a 10% price increase reduces consumption by around 4% in high-income countries (…) Any decision relating to the price of tobacco on the Luxembourg market must, however, be subject to “enlightened dialogue”.
Luxembourg has clearly decided, because of the significant excise receipts in this area: 752 million euros in taxes last year, thanks in particular to purchases by cross-border workers and tourists at the pump. A model that irritates health actors. The Cancer Foundation thus deplores “prices that are far too low in Luxembourg” and an offering to the tobacco industry “which has an interest in seeing that prices do not increase”.
The Foundation is campaigning for a “substantial” increase in the price of cigarettes, then successive annual increases. First, a question of political will: “It has been shown that taxes are the most effective means of reducing consumption (…) It is essential that the price of tobacco increases more than income,” she believes.
How to fight against smoking?
According to statistical data provided by the Cancer Foundation, 28% of residents over the age of sixteen have smoked in the past year and 19% smoke daily. “Worrying” figures for the Cancer Foundation, which plead for a series of measures aimed primarily at children and adolescents, in addition to the rise in prices. Among them, the need to continue prevention campaigns, ban all forms of advertising, even diverted, tackle passive smoking and reduce the availability of tobacco products. Smoking is thought to be responsible for approximately 1,000 deaths per year in Luxembourg.