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
