Tobacco taxes have never been so high in France. They now represent 84% of the price of a packet of cigarettes, one of the highest rates in the world in this area. To the point of becoming counterproductive? To believe one report from the Hexagone institute, if the number of daily smokers is falling, tax revenues are falling at a faster rate. The latter fell by 12% between 2020 and 2024, when consumption fell by only 8%. The fault, in large part, is the development of the parallel tobacco market. Faced with rising prices, more and more consumers are turning to contraband.
A phenomenon, however, difficult to assess. A recent customs report estimates that around 20% of cigarettes consumed on our territory escape national taxation while the Confederation of French Traders for its part estimates this rate at 38%. In mid-August, four Afghan nationals were tried in Paris after the discovery of sprawling trafficking: 13,000 counterfeit Marlboro cartridges, with tar contents almost twice the accepted standards, sold in five months for the tidy sum of 637,000 euros. Supply from Belgium, storage in the Paris suburbs, use of an accomplice grocery store and street sales in different Parisian spots, the Afghan network sprayed the entire north of the capital with fake cigarettes.
Systematically overestimated recipes
Illicit businesses of this type are regularly dismantled by the police. As recently as Wednesday, two men were arrested while they were unloading a van full of tobacco in Anzin, near Valenciennes. The police seized nearly 350 kilos of tobacco, imported from Luxembourg, for a total amount estimated at nearly 200,000 euros. The relentless consequence of this clandestine trafficking, not to mention purchases abroad: a considerable shortfall for Social Security, estimated at around 4 billion euros by the customs report.
Tobacco kills 75,000 people per year in France
A phenomenon that public authorities fail to take into account during their budgetary planning… Despite the available data, they systematically overestimate tobacco-related revenues – around 2 billion have been missing over the last four years compared to what was anticipated, observes Hexagone. And continue, year after year, to increase the price of a pack of cigarettes. Wrong? “The rise in tobacco prices is recognized by the WHO as the most effective lever for reducing smoking”insists the Alliance Against Tobacco to the Tangwall Campagin. As a reminder, tobacco kills 75,000 people per year in France, our country having one of the highest rates of smokers in Western Europe, and costs society 156 billion euros.
While it must be recognized that this dissuasive taxation has undoubtedly contributed to a fall in consumption – the share of respondents in the Public Health France survey declaring daily smoking having fallen from 25.5% in 2020 to 17-18% in 2024 – beware of the “Laffer effect”, which shows schematically that a tax rate that is too high reduces tax revenue.
A reduction in the tax rate does not necessarily lead to a drop in tax revenue, as evidenced by the recent example of the famous “flat tax” of 30% on capital income, introduced in 2018. The latter did not lead to a drop in revenue – even though its cost was estimated at around 1 to 2 billion euros.
