Netherlands Loses €2.6B as Smokers Buy Tobacco Abroad

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Netherlands Tobacco Tax

The Dutch government is losing an estimated €2.6 billion in tax revenue as smokers increasingly purchase their cigarettes and rolling tobacco abroad, according to new research from WSPM commissioned by the tobacco industry association VSK. This trend follows a significant tax hike in 2024, which increased taxes by 24% on cigarettes and 45% on rolling tobacco.

While the tax increase prompted about 7% of smokers to quit, the vast majority have sought cheaper alternatives outside the country. Last year, an average of 40% of all cigarettes and nearly half of all rolling tobacco for Dutch smokers were purchased abroad, often in neighboring countries like Germany and Luxembourg where the same products can be up to half the price. The Netherlands now has the second-highest tobacco tax rate in the EU at €7.66 per pack, surpassed only by Ireland. The findings highlight a significant loophole in the government’s strategy to curb smoking through high taxation, inadvertently fueling cross-border trade and substantial treasury losses.

Matthew Ma
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