Uncertain prospects for tobacco taxation within the European Union

Three weeks after the European Parliament failed to reach a common position on the revision of the Tobacco Excise Duty Directive, the issue has returned to the Irish Presidency, which has just taken over from the Council of the EU. For public health organizations monitoring the matter, this deadlock prevents the adoption of a weakened text and keeps open the prospect of a more ambitious directive, in a context where the Council itself remains divided, particularly on the tax treatment of new nicotine products.[1].

A dead-end vote with divergent political interpretations

On June 3, the European Parliament's Committee on Economic and Monetary Affairs (ECON) adopted a watered-down version of the European Commission's proposal, notably maintaining the minimum excise duty threshold on cigarettes at €200 per 1,000 units, compared to the €215 proposed by the Commission (the current threshold being €90), and providing for reduced rates and longer transition periods for newer nicotine products (e-cigarettes, heated tobacco, nicotine pouches). However, this compromise text was never put to a plenary vote: on June 17, MEPs rejected both this version and a slightly amended version of the Commission's initial proposal, leaving Parliament without a formal position at the end of the Cypriot Presidency.

For the Social Democratic (S&D) group, as well as for several civil society organizations monitoring the issue, including the Smoke Free Partnership and the National Committee Against Smoking (CNCT), this outcome represents a victory for public health: it prevents the adoption of a text deemed weakened and allows them to continue advocating, with the Irish Presidency, for a more ambitious EU-wide directive. The rapporteur for the text, Czech MEP Tomáš Kubín (Patriots for Europe), disputes this interpretation and sees it primarily as a refusal to cooperate with his political group. He argues for a more realistic approach: a gradual increase in rates, predictable rules, differentiated treatment based on products, and safeguards against market disruption and illicit trade, while acknowledging the need to modernize a tax framework that has become outdated in the face of the arrival of new nicotine products.

A Council that is equally divided

The deadlock in Parliament is further complicating the work of the Council, within which the positions of the Member States also remain significantly divergent. The Cypriot Presidency had already removed this issue from the agenda of the Ecofin Council in June, due to the lack of unanimity on the proposed excise measures. Sweden was among the Member States opposed to stricter tax treatment for so-called "reduced-risk" nicotine products, particularly nicotine pouches. Ireland, which has traditionally championed one of the most health-oriented positions in the Union, especially regarding the fight against smoking, thus finds itself in a delicate position: its own reservations about new nicotine products bring it closer to the cautious approach adopted by the Commission than to that advocated by Sweden. This further complicates the search for a compromise that could garner the support of all Member States. Several Member States, such as France, Belgium, the Netherlands and Finland, are advocating for the adoption of ambitious tax measures and supporting the Commission's initial position, while stressing that the taxation of some of these products, such as vaping products, should not prevent Member States from outright banning the marketing of other nicotine products in their territory.

A window of opportunity for more ambitious tobacco taxation

This institutional deadlock highlights the various lines of reasoning behind the revision of the Tobacco Tax Directive (TTD). For public health organizations, the lack of a parliamentary position is not necessarily a setback: it prevents the adoption of a text deemed weakened and allows them to continue advocating, to the Irish Presidency, an interpretation of the Commission's initial proposal focused on its structural measures.[2]. The challenge is to reduce tobacco product taxation levels between Member States and to establish mechanisms to curb tobacco consumption. It also involves extending taxation to new nicotine products already regulated at the European level or authorized on Member State markets. These same organizations reiterate that the scientific literature largely agrees on the role of taxation as one of the most effective levers for reducing smoking, particularly among young people. They point to the persistence, throughout parliamentary debates, of narratives promoted by the tobacco and nicotine industry regarding "harm reduction" applied to new products, which lead to a departure from essential issues and a minimization of the health impact of this strategy. The coming months should determine whether the Irish Presidency will adopt the compromise reached in the ECON Committee, propose a new text based on the Commission's initial objectives, or pass the buck back to the Commission. This issue is part of a broader context where several other behavioral taxes, such as those on sugar or alcohol, are the subject of similar debates at the European level. The public health stakes and objectives are increasingly well-documented, the need for tax revenue for member states appears crucial in relation to the illnesses caused by these behaviors, and the same objections regarding the risk of developing illicit markets are consistently raised.

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[1] Alistair Thompson, Weeks after Parliament's tobacco tax collapse, rapporteur urges Irish Presidency not to let committee's work go to waste, Brussels Morning, published on July 9, 2026, accessed the same day

[2] Tobacco taxation: the European Parliament does not vote on the proposed directive on taxes, Tobacco-Free Generation, published on June 23, 2026, accessed on July 10, 2026