Switzerland’s parliament voted 117 to 60 to reject the Federal Council’s plan to increase the tax on a packet of cigarettes in 2017. The Council of States, Switzerland’s upper house, will give its verdict next.
From 2005 to 2015, the price of a packet of the most widely sold cigarettes has risen from CHF 6 to CHF 8.50 according to 20 Minutes. The CHF 2.50 increase is the combination of a tax rise (+0.90) and a natural price rise (+1.60). The tax on a packet fell from 56.7%, in 2009, to 52.8% in 2015.
The last time the tax was increased was in 2013, when it went up CHF 0.10. A CHF 0.10 rise brings in around CHF 50 million of extra tax which is added into Switzerland’s social security pot which is used to pay for state pensions, benefits for workers that fall ill and other things.
According to Swiss federal office of public health, the annual cost of tobacco use is tens of billions of francs per year of which CHF 1.7 billion goes on medical treatments and CHF 3.9 billion on compensation for work absenteeism and invalidity. On the other hand, tobacco tax only brings in around CHF 2 billion annually.
Arguments put forward in parliament for not raising the tax included the high price of Swiss cigarettes compared to neighbouring countries. Because of the strong franc, they are cheaper in France, where they cost CHF 7. 64, in Germany (CHF 6.42), in Italy (CHF 5.67), and in Austria (CHF 5.34). If Swiss prices were increased further, both cross-border purchases and smuggling would flourish, they said.
Louis Schelbert of the Greens pointed out that both the cantons and smoking prevention groups wanted to see rises. Numerous studies have shown how effective price increases are in reducing smoking.