The European Union is contemplating substantial increases in taxes on tobacco products and the introduction of new excise duties for electronic cigarettes (vapes) and nicotine pouches, according to reports from Euractiv and Politico citing an internal European Commission document. This move aims to update the bloc's 2011 Tobacco Excise Directive (TED) and address concerns over new nicotine products popular with youth.
The Commission's preferred scenario reportedly includes raising the minimum excise duty on cigarettes by 139%, from €90 to €215 per 1,000 units. The tax on roll-your-own tobacco could see an even larger increase of 258%, from €60 to €215 per kilogram. Cigars and cigarillos could face the most dramatic hike, potentially up to 1090%, from €12 to €143 per 1,000 pieces or kilogram. Nicotine pouches are proposed to be taxed at €143 per kilogram.
For e-cigarettes, a tiered tax based on nicotine content is suggested. This initiative follows calls from 16 EU countries, led by the Netherlands, to harmonize varied national tax rates that distort the single market and to include new products in the directive. The Commission estimates its favored tax increase scenario could generate an additional €15.1 billion in revenue, asserting that taxation has accounted for about 40% of the decline in EU smoking rates over the past decade. Ukraine, in its European integration efforts, has also recently implemented a law to gradually increase its tobacco excise taxes to meet EU minimums by 2028.
