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The taxation model utilized by the French authorities is a sophisticated, “mixed formula” designed to maximize revenue while simultaneously enforcing a price floor. The primary engine of this system is the excise duty, which is calculated based on the quantity of tobacco rather than its perceived luxury value. This tax combines a proportional percentage of the retail price with a fixed amount per unit. To prevent the entry of “budget” brands that might undermine health objectives, the state applies a “minimum tax” rule. If the calculated excise duty falls below a specific threshold set by the government, the minimum amount is applied automatically. On top of this, a standard Value-Added Tax (VAT) is layered onto the final retail price, ensuring that the state benefits from every stage of the transaction.
