Tobacco taxation: a crucial European debate for the years to come

The revision of the European Tobacco Excise Directive (TED), presented by the Commission, continues to fuel a lively debate within the European Parliament. The aim of the text is to modernize an outdated tax framework, harmonize taxes between Member States, and better address the rapidly evolving market for tobacco and other nicotine products. Several MEPs and public health experts have welcomed the ambition of the text, which could strengthen prevention policies and reduce access to the most harmful products, starting with combustible cigarettes.

During a public hearing in late November, other voices expressed concerns about the economic, social, and operational consequences of a reform deemed too broad, too rapid, or insufficiently differentiated by product. The discussions highlighted sharply contrasting positions, pitting tobacco control experts, who support an ambitious revision of the directive to strengthen public health protection, against the industry narrative, championed by several countries, which seeks to weaken the reform.[1].

Tax harmonization deemed necessary to reduce disparities and strengthen the fight against smoking

For many experts and MEPs present at the hearing, the revision of the Tobacco Products Directive (TPD) primarily addresses a crucial need: to eliminate the significant disparities in tobacco taxation between Member States. Currently, the tax burden on cigarettes varies considerably from one country to another, sometimes by as much as four times. In practical terms, a pack can cost two to three times less in some Central or Southern European countries compared to other states with higher taxes, such as France or Ireland.

These discrepancies create a windfall for cross-border purchases and undermine the effectiveness of national policies, particularly in countries that have chosen to rely on high taxes to reduce smoking. Those in favor of the reform emphasize that this situation primarily benefits the tobacco industry, which can exploit internal tax barriers to maintain the attractiveness of its products and perpetuate the smoking epidemic.

Several public health specialists have emphasized that a coordinated increase in European minimum tax rates, based on the principle of a weighted minimum tax, is one of the most powerful levers for reducing tobacco consumption across the continent. A significant price increase is, according to established scientific knowledge, one of the most effective ways to reduce the number of smokers, particularly among young people. From this perspective, the reform of the European Tobacco Tax (ETT) is seen as an essential tool for restoring coherence to European fiscal policies and preventing the lowest excise tax rates from creating massive and counterproductive distortions.

Taxing oral products: a risk of indirect legalization that worries several states

One of the key aspects of the reform concerns extending the directive to new nicotine products such as e-cigarettes, heated tobacco, and oral nicotine products. Several members of parliament believe that the current lack of harmonized regulations makes these products, which are often inexpensive, heavily flavored, and intensively marketed to young people, more attractive. They argue that a minimum European tax could limit access to these products and prevent the tobacco industry from focusing its efforts on lightly taxed segments to recruit new consumers.

But this extension also raises a major concern: taxing certain oral products, particularly nicotine pouches, would effectively legalize them. In several countries, including Belgium and the Netherlands, these products are banned, and France is also in this situation. By including these products within the scope of the TED Directive, they risk being automatically recognized as legally marketable, since a European excise duty can only be applied to products authorized on the internal market. According to numerous experts and national health authorities, such a development would weaken national policies for the protection of young people, create a regulatory loophole that would be difficult to close, and would precisely align with the industry's strategy: securing the presence of these products on the European market by obtaining tax recognition. This issue therefore crystallizes a heated debate between necessary harmonization and the risk of weakening the most protective national measures.

Concerns about social impacts, risk reduction, and illicit trade

Parliamentary debates raised points of contention regarding the social consequences of a poorly implemented tax increase. Several members of parliament pointed out that the poorest segments of the population, among whom smoking prevalence is highest, are likely to bear the brunt of the economic pressure if prices rise without a corresponding increase in access to smoking cessation services, psychological support, and targeted assistance measures. Effective taxation must be part of a comprehensive strategy that combines prevention, reducing social inequalities in health, and strengthening smoking cessation services. This is all the more crucial given that tax policy, in itself, can reduce health inequalities, as the most vulnerable populations are more receptive to tax increases.

The debates also revealed the controversial nature of the discourse surrounding "harm reduction." Experts emphasized that alternative products, such as vaping products, heated tobacco, or nicotine pouches, cannot be considered genuinely less risky options. They expose users to other toxic substances, their long-term effects remain insufficiently documented, and their marketing is accompanied by attractive marketing specifically targeting a young audience. For several participants, the industry's promotion of these products aims primarily to maintain nicotine addiction rather than to encourage people to quit combustible tobacco.

The issue of illicit trade was also a central topic. Some raised concerns about the risk of increased illicit trade if excise duties were raised, but many experts pointed out that this phenomenon is historically linked to the tobacco industry itself. Investigations by the WHO, OLAF, and Europol show that the majority of illicit trade involves cigarettes originating from legal production chains, fueled by strategies of overproduction, targeted exports, or transit through areas with weak controls. Taxation plays a secondary role compared to the responsibility of manufacturers and the inadequacy of independent customs controls coupled with a tracking and traceability system that remains in the hands of the manufacturers. To be effective, the reform of the TED will need to have clear objectives for reducing the consumption of tobacco and new nicotine products, and be accompanied by strengthened controls, independent traceability and a clear distancing of the industry in the definition and implementation of fiscal policies and the fight against illicit trade.

A strategic issue for the future of European anti-smoking policies

At the end of the discussions, one conclusion is inescapable: the revision of the Tobacco Control Directive (TCD) is not simply a technical adjustment to European taxation, but a strategic choice that will determine its ability to achieve a tobacco-free Europe and, beyond that, will have a lasting impact on the Union's capacity to protect public health. The debate revealed that the directive's effectiveness will depend above all on its consistency with other European instruments for combating tobacco use, whether these concern product regulation, the protection of young people, or the fight against tobacco industry interference.

For several members of parliament, this reform represents an opportunity to strengthen European ambition in the spirit of the European Cancer Action Plan, by making taxation a central pillar of prevention. Others stressed that its success will depend on the ability of member states to simultaneously implement robust health policies, particularly regarding smoking cessation support, market surveillance, and independent control of nicotine products. The directive will only be effective if it is part of a broader framework capable of responding to the rapid diversification of nicotine products and the industry's adaptation strategies.

The legislative process now underway will determine the path the Union intends to take in the coming years. An ambitious reform would consolidate a coherent approach, based on protecting young people, reducing social inequalities in health, and strictly regulating the tobacco industry. Conversely, a weak reform could perpetuate current shortcomings, making it more difficult to achieve European tobacco reduction targets.

©Generation Without Tobacco

AE

[1] Colin Stevens, Experts and MEPs express concerns for the revised Tobacco Excise Directive (TED), Euroreporter, published on November 27, 2025, accessed on December 1, 2025