The Dutch government’s tobacco tax hikes have stopped generating extra revenue due to cross-border cigarette purchases and declining smoking rates, according to a Ministry of Finance report. A 5-cent tax increase per pack was once projected to add €7 million annually, but that figure is now revised to zero. “At the current level of tobacco excise, further increases are expected to trigger strong behavioral changes that will fully offset any extra revenue,” the report stated.
Finance officials expect tobacco tax receipts to hold steady at €2.5 billion in both 2025 and 2026, with the current excise duty set at €7.81 per pack and no further hikes planned. Customs data showed that 45% of cigarette packs lacked a Dutch excise stamp last year, up from 15% in 2021, illustrating the scale of cross-border buying. Most were legally purchased abroad, where prices are lower, but over 10% were counterfeit.
Health officials say the hikes are curbing smoking, as the National Institute for Public Health and the Environment estimates 7% of smokers quit after the most recent increase, while 22% cut back.
