Case Studies on the Impact of the Revision of the European Union Tobacco Tax Directive: Spain

This Report was written by Ángel López-Nicolás from Universidad Politécnica de Cartagena (UPCT) in Spain. The report presents a country case study of Spain. Specifically, López-Nicolás compares the impact of an unofficial draft revision of the EU Tobacco Tax Directive (TTD) and an alternative, enhanced TTD revision to the status quo. Due to a lack of significant tobacco tax increase, cigarettes are becoming more affordable, trending down since the mid-2010s (other than during the COVID-19 pandemic). While both the draft TTD revision and the enhanced draft TTD revision would not reverse this trend of increasing affordability, the enhanced TTD would restore 2018 levels only one year after enactment. Both of these scenarios would also increase the price of cigarettes and fine-cut tobacco, but the enhanced version would reduce the price gap between the products. This would discourage trading down to the cheaper fine-cut tobacco among consumers. The enhanced TTD would also yield higher excise tax revenues from cigarettes, fine-cut tobacco, and HTPs compared to the unofficial draft and the status quo. The report concludes with recommendations for Spain to support the resumption of the TTD renewal process, as well as to push for the policies outlined in the enhanced TTD to reap both public health and fiscal benefits.

[SPANISH]

A Report summarizing the alternative, enhanced TTD can be found here.