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  • EU’s Plan to Tax Tobacco, Large Companies Continues

    EU’s Plan to Tax Tobacco, Large Companies Continues

    Last week, Euractiv reported reviewing a document where the European Commission was pushing for new taxes on tobacco, large corporations, electronics waste, and carbon emissions, to help fund its next long-term budget (2028–2034). This week, more details and context are emerging.

    With the costs of most everything increasing, and the fact that the EU needs to begin repayment of €650 billion in Covid recovery loans starting in 2028, Euractiv said the EU needs new income sources beyond traditional gross national income-based contributions, which fund 56% of the current budget.

    The reported plan includes a Tobacco Excise Duty Own Resource (TEDOR), expected to bring in major revenue while supporting public health goals. Previous reports suggest the Commission has floated a 139% tax hike on cigarettes. Other proposed revenue sources include a Corporate Resource for Europe (CORE) for firms with over €50 million turnover, and green taxes like carbon levies (ETS1, CBAM) and electronics waste contributions.

    All 27 member states must approve the plan unanimously, making negotiations politically complex. However, the Commission views the next Multiannual Financial Framework (MFF) as a critical moment to secure the bloc’s economic, environmental, and defense goals.

  • EU Considers Tobacco Tax as New, Long-Term Revenue Stream

    EU Considers Tobacco Tax as New, Long-Term Revenue Stream

    The European Commission is exploring a potential EU-wide tobacco levy to help fund its next long-term budget, according to a German government report seen by Euractiv. The idea, still in early stages, could become a new source of “own resources” for the EU alongside member state contributions and customs duties.

    The proposal, which also mentions a possible levy on electronic waste, comes amid rising EU spending priorities such as defense. Tax Commissioner Wopke Hoekstra has been pushing for higher tobacco excise taxes, and a leaked draft suggests a potential 139% hike on cigarettes.

    While EU countries already apply tobacco taxes, the Commission may consider a separate levy that funnels revenue directly into the EU budget. However, any revision to the Tobacco Excise Tax Directive (TED) would require unanimous approval from all member states—some of which, including Greece and Romania, strongly oppose changes.

    The tobacco industry has warned such measures could backfire, fueling black market activity and reducing national revenues. An official proposal on the TED revision is expected this fall.

  • EU Trying to Stop “Tobacco Tourism”

    EU Trying to Stop “Tobacco Tourism”

    As the European Commission considers sweeping tobacco tax reform aimed at narrowing price gaps across the continent, high-income countries like Luxembourg would be hit hardest, RTL Today, Luxembourg’s main television channel, reported. The reform would be meant to deliver a major blow to “tobacco tourism.”

    Most of Luxembourg’s €1.4 billion in 2024 tobacco tax revenue came from foreign buyers, with less than 5% of the tobacco sold in the nation consumed locally. Currently, packs of cigarettes in Luxembourg cost less than €6, far below prices in neighboring France (€13) and the Netherlands (€10), attracting cross-border shoppers and smugglers.

    Though not yet formalized, the WHO’s calls for price hikes on harmful products by 2035 would raise Luxembourg’s prices €3.50 per pack of cigarettes, or 60%. RTL Today said Luxembourg’s Finance Ministry is monitoring the situation.

  • Irish PM Says Big Tobacco Using Old Playbook for Vape

    Irish PM Says Big Tobacco Using Old Playbook for Vape

    Speaking at the World Conference on Tobacco Control, Irish Prime Minister Micheál Martin urged governments worldwide to adopt “the strongest possible measures against vaping,” warning that e-cigarette manufacturers are replicating the “predatory playbook” of the traditional tobacco industry—particularly by targeting youth.

    “All the same issues we had to deal with in respect of cigarettes, we have to deal with vaping,” said Martin. “We’re catching up a bit later in Ireland with that.”

    Ireland’s new restrictions on flavorings, product placement, and packaging design are scheduled to be enforced in February 2026, based on legislation introduced by the previous government. Youth vaping is accelerating across Europe—10.8% of adolescents aged 13–15 now use some form of tobacco, including e-cigarettes.

    The rise in youth vaping spurred the European Commission to update its Recommendation on Smoke-Free Environments to explicitly include vapes and heated tobacco products, urging member states to ban vaping wherever smoking is prohibited, and is now further considering flavor bans, restrictions on online sales, and heavier taxation.

  • EU Weighs Major Tobacco Tax Overhaul

    EU Weighs Major Tobacco Tax Overhaul

    The European Commission is preparing a sweeping reform of the Tobacco Excise Tax Directive (TED), targeting a sharp increase in taxes on traditional cigarettes and rolling tobacco, with more modest hikes planned for alternative products like heated tobacco and e-cigarettes, according to an internal working document seen by Euractiv.

    Key Highlights from the Draft Proposal:

    • Cigarette Tax: Proposed increase of 139%, from €90 to €215 per 1,000 units.
    • Rolling Tobacco: Tax hike of 258%, from €60/kg to €215/kg, aligning its burden with cigarettes.
    • Cigars & Cigarillos: Massive proposed increase of 1,090%, to €143/1,000 units or per kg.
    • Shisha/Waterpipe Tobacco: Proposed at €107/kg.
    • Nicotine Pouches: Suggested tax of €143/kg.
    • E-Cigarettes: Tax based on nicotine strength:
      • >15mg/ml: €0.36/ml
      • ≤15mg/ml: €0.12/ml
    • Heated Tobacco:
      • Unit-based: €108/1,000 units
      • Weight-based: €155/kg
      • Roughly 50% lower tax burden compared to cigarettes

    Policy Context & Challenges:

    • A 15-country coalition, led by France and the Netherlands, is urging stronger EU-wide tobacco controls, including taxation on emerging nicotine products.
    • The Commission says the current rules are “no longer fit for purpose.”
    • However, changes to the TED require unanimous support from all EU member states — a high bar amid diverging national interests.
    • Italy, Greece, and Romania have objected to treating alternative products (like heated tobacco) the same as combustible cigarettes, citing harm reduction arguments
  • EU Sees Highest Rate of Illicit Cigarettes Since 2015

    EU Sees Highest Rate of Illicit Cigarettes Since 2015

    According to the 2024 KPMG study, produced annually and commissioned by Philip Morris Products SA, smokers in the European Union consumed 38.9 billion illicit cigarettes in 2024, a 10.8% increase versus 2023, the highest level since 2015. That number accounts for 9.2% of total cigarette consumption, with governments losing as much as €14.9 billion in tax revenues at a time when many countries face intense economic pressures and rising black markets.

    PMI called for effective policymaking to counter the growing threat of illicit trade, and said it believes that steep and abrupt tax increases are exacerbating the issue and benefitting criminals who supply unregulated, untaxed, and inferior products. To combat this growing threat, PMI urges the adoption of evidence-based regulation with balanced and predictable taxation through tax calendars, continued public-private collaboration, and enhanced support of regional and national law enforcement agencies.

    “The illicit tobacco trade threatens the European economy, public health, security, and social stability; today, higher-taxed and higher-priced markets such as France and the Netherlands are especially impacted by illegally imported and counterfeit goods,” said Christos Harpantidis, PMI’s Senior Vice President, External Affairs. “Its massive socioeconomic impact negatively affects tax collection, job creation, and legitimate businesses, the engine of our European economies. The availability of cheap, unregulated cigarettes in the underground economy also impairs efforts to reduce smoking rates and achieve a smoke-free future.”

    France has the largest illicit market in Europe, reaching 18.7 billion illicit cigarettes consumed last year, 37.6% of total consumption. The Netherlands saw the largest increase in illicit cigarettes, which doubled to 17.9% of total consumption.

    A detailed overview of the results, country profiles, and methodology of the KPMG study is available here.

  • Report: Black Marketeers Continue to Evolve with Technology

    Report: Black Marketeers Continue to Evolve with Technology

    Tobacco smugglers and black marketeers are increasingly using technologies such as social media and drones to deliver cigarettes to smokers in Europe and avoid law enforcers, a report found.

    According to the 2024 KPMG study, produced annually and commissioned by Philip Morris Products SA, the illegal networks’ flexible strategies have helped illicit consumption increase 10.8% in the EU from 2023, with criminal groups shifting toward smuggling smaller packages, more often, via budget airlines, railways, and drones. They are also increasingly bypassing physical stores to sell directly to consumers on social media.

    The report showed that criminal groups are holding less inventory, which is reflected in a decrease in the size of illicit cigarette seizures as the gangs mitigate their risks and reduce the impact of raids by law enforcers. The more recent change in tactics follows another shift from 2020, when the groups moved production closer to end-markets, partly in response to the pandemic disruption, and also reducing the chance of detection.

  • Bulgarian Vape Ban Pending EU Approval

    Bulgarian Vape Ban Pending EU Approval

    The ban on vaping in Bulgaria is set to be enforced, but only after receiving the green light from Brussels. This emerged following the meeting of the parliamentary Committee on Economic Policy and Innovation, which discussed the second reading of amendments to the Law on Tobacco, Tobacco and Related Products.

    The bill, proposed by Kostadin Angelov from GERB (Citizens for European Development of Bulgaria) in February, calls for a full ban on the sale, use, and advertisement of vaping products, as well as energy drinks targeted at minors, according to the Bulgarian News Agency.

    Petar Kanev, chair of the Committee and member of the Bulgarian Socialist Party Parliamentary Group – United Left, described the legislation as one of the most anticipated in recent times. In February, the parliament approved the bill at the first reading with overwhelming support, gathering 197 votes in favor.

    During the committee session, members discussed the timeline for the bill’s enforcement, taking into account the requirement to notify the European Commission about specific provisions. They agreed that while the draft would proceed to the second reading in parliament, it would not come into effect until formal notification from Brussels is obtained.

  • Fifteen EU Members Pushing for Excise Hikes on Tobacco

    Fifteen EU Members Pushing for Excise Hikes on Tobacco

    A majority of EU member states have called for the European Commission to press ahead with a long-delayed plan to tax vapes and raise minimum excise rates on cigarettes and cigars, according to Financial Times. 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 Tobacco Excise Tax Directive (TED) was controversially left out of the Commission’s 2025 work program, 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.

    “They want her to unblock the proposal, which is yet to be adopted by the commission and would, for the first time, set minimum taxation rates for vapes, nicotine pouches and heated tobacco,” Paola Tamma and Andy Bounds wrote for Financial Times. “It would also substantially raise minimum excise rates for cigarettes and cigars to harmonize taxation across the bloc and reduce tobacco fraud.”

    “The current scope and provisions of the directive are insufficient to enable member states to deal with the significant challenges posed by ongoing developments and trends in the European tobacco market, including the emergence of novel products,” the 15 EU finance and economy ministers wrote in the letter.

    Initially scheduled for 2022, the commission delayed the bill because of concerns about the impact that rising excise taxes could have at a time when inflation hit double digits across the bloc. Olaf, the European Anti-Fraud Office, estimates lost revenue from illicit tobacco to be more than €10 billion a year.

    The bill, however, requires unanimous approval. Twelve countries did not sign the letter, with Romania, Italy, and Greece among the most vocal opponents of revising the directive. A letter from the dissenting countries last month said they did not deem it necessary ‘‘to proceed…to a comprehensive revision of the overall EU legislation”. They also added that smoking rates are already falling. In a leaked version of the 2022 proposal, excise rates would have increased by 100% for cigarettes, 200% for rolling tobacco, and 900% for cigars and cigarillos.

    Paul Varakas, director of the European Cigar Manufacturers Association, said it was ‘‘out of touch and completely irresponsible in the context of an uncertain trade war.”

    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”.

  • Leaked EU Document Calls for “Substantial” Taxes on Nicotine Pouches

    Leaked EU Document Calls for “Substantial” Taxes on Nicotine Pouches

    According to The Vaping Post, a confidential European Commission (EC) document, leaked by Snusjournalen, has revealed a contentious plan to impose a substantial EU-wide tax increase on nicotine pouches (NPs). Spearheaded by the Directorate-General for Taxation and Customs Union (DG TAXUD), the proposed measure could trigger widespread economic, political, and criminal repercussions across the Union.

    Europe already finds itself in a tenuous economic situation, dealing with economic instability that includes inflation and escalating trade tensions with the United States. Worse on the nicotine front, a recent Europol report shared by Euroreporter, “The Changing DNA of Serious and Organised Crime,” highlights the direct link between excessive taxation and the rise of black markets—specifically citing tobacco and nicotine products. The report warns that strict tax policies create opportunities for criminal networks to expand operations, smuggle products across borders, and launder illicit funds. Experts fear that a steep price increase on NPs could drive a surge in illicit sales, with products being illegally imported from non-EU nations like China.

    Although the European Commission has yet to confirm the directive publicly, the leak has already sparked significant concerns among key stakeholders, including law enforcement, investors, and consumer advocacy groups. Given Europol’s warnings on illicit trade and the broader political and economic climate, this proposed tax increase is shaping up to be one of the most contentious regulatory battles in the coming months.

    “In light of these developments, the proposed tax hike on NPs adds yet another layer of uncertainty to an already volatile regulatory and economic landscape,” wrote The Vaping Post. “More importantly, with the vaping industry currently facing such a critical juncture, which could result in less availability of vaping products to smokers using them to quit, a harsh tax set on snus would be currently all the more detrimental to public health.”