Tobacco taxation has always been a headache for legislative institutions, balancing the need to protect production chains and—above all—consumer health, but also to make the state balance its books. And so the European Commission is reportedly preparing a unprecedented reform for cigarettes, including electronic ones and even for nicotine sachets, with the unprecedented aim of directly financing the Union budget.
To date, tobacco taxes have been imposed solely by individual states, but according to a series of confidential documents released by Euractiv, the EU wants to change the rules of the game. This, in addition to significant losses for member states' treasuries (estimated at -15 billion euros), could lead to record increases in consumer prices, with excise duties rising from +139% for cigarettes to +1.090% for cigars. Currently, when asked by Adnkronos, the European Commission spokesperson following the tax dossier responded that he "had no comments or further information to share at this time."
Cigarettes: Price increase proposal and forecasts
The heart of the proposal lies in a single line in a German government report that specifically mentions the possibility of "developing new sources of own resources," with reference to tobacco taxes. The plan will therefore be included in a package of 17 documents that the Commission will present starting July 16 as part of the negotiations for the next Multiannual Financial Framework (MFF), which will enter into force in 2028. Translated into figures, the drafts outline drastic increases in excise duties: +139% for traditional cigarettes, +258% for rolled tobacco, +1.090% for cigars, with significant increases also on heated tobacco, e-cigarettes and alternative products.
According to some estimates, the average impact on prices consumption would be higher than 20 %, with an effect on inflation of about half a percentage point. In Italy, a pack of cigarettes could cost over one euro moreWhile the Commission defends the measure as a useful tool to reduce consumption for public health reasons, several experts and governments contest the strategy, pointing out that previous experiences—such as the French one—have shown a sharp increase in smuggling following sudden price increases. "The risk is that more revenue will be lost than collected," explained a European official quoted by Euractiv.
Less revenue for Member States
In addition to the fear of a parallel market that would make a roaring profit to the detriment of consumers, the second critical front concerns the tax revenue evasion to the Member States. The prospect of these resources ending up in the Community budget is considered unacceptable by several countries. Sweden was among the first to protest, calling the proposal "completely unacceptable." Finance Minister Elisabeth Svantesson reiterated that "the revenue must remain with individual countries, not end up in the hands of European bureaucracy." It's no coincidence that the reaction is so harsh: in Sweden, the spread of snus, smokeless sachets of tobacco, has helped reduce the smoking rate from 15% to 5% and brought mortality from smoking-related diseases down to levels 54% below the EU average.
