EU Commission Considers 258% Tobacco and Vape Tax
The European Commission is contemplating substantial increases in excise duties on tobacco products, including a potential 258% hike on rolling tobacco and a 139% rise for cigarettes, according to an internal impact assessment. The document, obtained by POLITICO, also reveals plans to introduce EU-wide taxation on currently untaxed or inconsistently taxed items like vapes (e-cigarettes) and heated tobacco products.
This initiative responds to growing pressure from member states, with 16 countries, led by the Netherlands, having previously urged the Commission to update the Tobacco Excise Tax Directive, last revised in 2011. They argue that varied national tax rates distort the single market and that new products popular with youth need harmonized taxation. Tax Commissioner Wopke Hoekstra hopes to adopt the revised directive by summer.
The Commission’s preferred scenario outlined in the assessment would see minimum cigarette taxes rise from €90 to €215 per 1,000 units and rolling tobacco tax from €60 to €215 per kilogram. Cigars could face a staggering 1,092% increase. For e-cigarettes, a tiered tax is proposed: €0.36 per milliliter for liquids with over 15mg/ml of nicotine and €0.12/ml for those below that threshold. This highest tax option is projected to bring in an additional €15.1 billion in tax revenue annually.
The document emphasizes that higher tobacco taxes are the “single most effective measure to reduce overall tobacco use,” attributing 40% of the smoking decline in the EU over the past decade to taxation. However, countries like Italy, Greece, and Romania have urged more caution regarding drastic tax increases.
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