Commission looks to revise tax on tobacco and alternatives
Source: Euractiv
The European Commission is readying a proposal to revise tobacco excise tax, according to a commission source close to the matter.
The Tobacco Excise Tax Directive (TED) was controversially left out of the Commission’s 2025 work programme, though some states have been pushing for higher taxes on both tobacco and alternative products such as e-cigarettes, heated tobacco, and nicotine pouches. Unlike traditional tobacco, alternative products still lack an EU-wide excise framework.
Euractiv reported last week that the EU commissioner in charge of taxation, Wopke Hoekstra, was testing the waters for such an initiative. And the Financial Times reported on Monday that 15 EU finance ministers had sent a letter to Commission president Ursula von der Leyen urging action.
A Commission official told Euractiv that it is looking into the letter and will decide on the appropriate follow up.
“The rules for tobacco taxation are no longer fit for purpose, and we are currently considering a proposal to amend them,” the Commission source said.
The letter – signed by Austria, Belgium, Bulgaria, Czechia, Denmark, Estonia, Finland, France, Germany, Ireland, Latvia, The Netherlands, Slovakia, Slovenia and Spain – called on the Commission to take “without delay the necessary steps” to update the directive.
The ministers “regretted” the Commission’s lack of action so far, writing that it has led to “distortions in the single market” as member states have taken measures individually.
In March, a letter from 16 health ministers called on Health Commissioner Olivér Várhelyi to re-visit all tobacco-related legislation, including taxation. The latest letter is significant given that finance ministers often clash with their health counterparts over tax questions.
Rocky road ahead
However, revising the EU’s excise tax requires unanimity among member states, and for now that appears a long way off.
Twelve countries did not sign the letter, with Romania, Italy, and Greece among the most vocal opponents of revising the directive.
Italy’s Deputy Prime Minister Antonio Tajani recently sent a letter to Hoekstra saying that when it comes to tax, alternative tobacco products should not be treated the same way as traditional cigarettes.
States opposing action insist that it is not the right time to revise TED, considering high inflation.
Moreover, they believe that countries such as France, who unilaterally increased taxation without coordinating with other member states, will not be impacted by an increased EU excise tax.
An EU diplomat representing a southern state told Euractiv that high tobacco taxation in France and The Netherlands had resulted in black markets and increased cross-border shopping, with the diplomat accusing Paris and The Hague of pushing others to “repeat the same mistake”.
The original article: belongs to Euractiv .
