International Policy Digest is reporting that a new compromise proposal from Cyprus may help break the long-standing deadlock among EU member states over revising the Tobacco Excise Directive, which has not been updated since 2011. The European Commission’s 2025 proposal sought to raise minimum excise duties and extend taxation to newer products such as heated tobacco and nicotine pouches, but faced strong opposition from several countries concerned about market disruption and illicit trade.
The Cyprus proposal retains higher taxes and broader product coverage but introduces a more gradual approach, including transition periods for implementation and limits on automatic inflation-linked increases. It also offers more flexibility for member states in applying taxes to newer nicotine products, addressing key concerns raised in earlier negotiations that stalled progress.
Initial reactions from EU governments suggest cautious support for the revised approach, though unanimous agreement from all 27 member states remains required. The outcome is time-sensitive, as failure to reach a deal during Cyprus’s presidency could shift negotiations to Ireland, where officials are expected to push for stricter tax measures.