Three European NGOs are calling on Luxembourg to stop its tobacco tax dumping

The National Committee Against Smoking (CNCT), the Belgian Cancer Foundation, and the Dutch Cancer Society (KWF) published an opinion piece in the Luxembourg Times, calling on the Duchy's public authorities to end their policy of tax dumping on tobacco products.[1].

Most of the tobacco sold in Luxembourg is consumed by its European neighbors.

While most European countries have seen legal tobacco sales volumes decline for several years, Luxembourg stands out with a sharp increase in its tobacco sales. Legal tobacco sales in Luxembourg increased by 53 million metric tons (%) between 2019 and 2024. By comparison, tobacco sales fell by 32 million metric tons (%) in the Netherlands, 31 million metric tons (%) in France, and 28 million metric tons (%) in Belgium. These trends are linked to the tobacco industry's strategies of oversupplying the Luxembourg market. In 2024, of the five billion cigarettes sold in Luxembourg, only 12 million metric tons (%) were actually consumed by Luxembourgers, with the vast majority destined for neighboring countries that have already implemented upward tax policies on tobacco products.

Outsourcing the costs of tobacco

According to the authors of the opinion piece, the government's desire to maintain significant price differences between Luxembourg and its neighbors has negative fiscal and health consequences for the latter. These tax dumping practices tend to undermine the effectiveness of anti-smoking policies implemented in France, particularly in regions bordering Luxembourg. Furthermore, cross-border trade between the two countries generates a tax shortfall of several hundred million euros. The opinion piece argues that such practices contribute to boosting the tobacco economy in Luxembourg, while shifting the costs onto its European partners. As a reminder, the net social cost of smoking is estimated at €156 billion per year in France, while healthcare expenditures attributable to smoking remain significantly higher than the revenue generated by tobacco sales.

Anticipating the European directive on tobacco taxation

In anticipation of discussions regarding the revision of the Tobacco Tax Directive (TTD), the three organizations call on the Luxembourg authorities to anticipate a potential reassessment of tobacco excise duties at the European level. Indeed, the revised directive could adjust tax levels tobacco taxes would be adjusted based on the purchasing power of member states. Such a provision could result in a substantial tax increase in Luxembourg, one of the world's wealthiest countries. However, these proposed revisions are the subject of intense lobbying by the tobacco industry and have been described as excessive by Luxembourg's current Finance Minister, Gilles Roth.

FT

[1] Luxembourg Times, How long can Luxembourg's tobacco model last?, 20/03/2026, (accessed 23/03/2026)

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