Europe Debates Tax Hike on Heated Tobacco Products

The European Union is currently embroiled in significant debates over the tax regulation of heated tobacco products, as the Danish Presidency of the Council, backed by the European Commission, pushes for stricter guidelines. This move is part of a long-overdue revision of the European directive on tobacco taxation, which has not been updated since 2011 despite the market’s transformation by new nicotine products like vapes and heated tobacco.

In July 2025, the European Commission proposed modernizing the tax framework to harmonize excise duties and reduce disparities between Member States. A key element of this proposal involves integrating heated tobacco into the harmonized regime. Initially, a minimum tax threshold of €155 per kilogram was suggested. However, the Danish Presidency has since proposed more than doubling this floor to €360 per kilogram, alongside maintaining a minimum rate of 55% of the retail price.

This aggressive stance aims to address discrepancies in how products are taxed based on weight versus units. Anti-tobacco organizations like the Smokefree Partnership point out that taxing by weight can lead to lower effective duties compared to per-unit taxation, given the light weight of tobacco sticks. They argue that even with the proposed increase to €360/kg, heated tobacco products would still enjoy a significant tax advantage over traditional cigarettes, potentially encouraging a shift in consumption rather than cessation.

The proposal has elicited mixed reactions. Health organizations and the WHO advocate for unit-based taxation to ensure parity with combustible cigarettes and prevent these new products from becoming low-cost alternatives that foster addiction. Conversely, some Member States with strong tobacco industry ties are resisting the “super-tax,” arguing for a price differential to support harm reduction and prevent illicit trade. These countries often host production facilities for major companies like Philip Morris International, influencing their national stance.

The outcome of these negotiations will be pivotal for the future of European tobacco control policy. While the proposed tax hikes are substantial, critics argue they may still leave heated tobacco cheaper than cigarettes, preserving the industry’s profit margins and marketing leverage. As discussions continue, the role of civil society and NGOs in pushing for ambitious public health goals remains a central, albeit contested, element of the legislative process.

• Read more: European Flavor Vape Bans: Countries, Rules & Impact
• News source: European debates surrounding the tax regulation of heated tobacco

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Matthew Ma

Marketing at Ecigator

With over a decade of experience in the e-cigarette industry, Matthew Ma is a seasoned expert in both the manufacturing and usage aspects of vaping products. His extensive background has provided him with a deep understanding of the intricacies and evolving dynamics of e-cigarettes.

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