The European Economic and Social Committee (EESC) recognises the need to adapt the excise duty framework for tobacco products in line with market developments. However, it urges caution regarding excessive increases in excise duties, as these could lead to an increase in illicit trade.

Any increase in tobacco excise duties must be proportionate, economically viable and beneficial to businesses, workers and society as a whole, said EESC member Mariya Mincheva, standing in for Matteo Carlo Borsani, rapporteur for the EESC opinion on the revision of the Tobacco Taxation Directive. Speaking at the EESC plenary session in February, Ms Mincheva warned against sharp increases in excise duties, which could have adverse effects, such as fuelling illicit trade, undermining tax revenues and weakening public health outcomes. 

For this reason, the EESC recommended gradual adjustments to excise duties, accompanied by strengthened enforcement, customs cooperation and cross-border anti-smuggling measures. Policy-makers should involve the social partners, through sharing of clear and transparent information on any policy measures and draft legislation and consultation before proposing any future policies or legislation.

The EESC called for sufficient flexibility for the Member States in their excise structures, including the option to apply unit-based or weight-based taxation for heated tobacco products. This would allow national market conditions to be taken into account while respecting EU minimum rates. In line with subsidiarity and the Member States’ fiscal sovereignty, the Commission’s use of delegated acts should be limited to technical adjustments linked to inflation.

While supporting efforts to reduce tobacco consumption, the EESC noted that taxation alone cannot achieve this objective. It called for risk-proportionate taxation so that non-combustible and reduced-risk products are not taxed at the same rate as combustible tobacco, in line with the 'less harm, less tax' principle and the goals of Europe’s Beating Cancer Plan. 

Proposed by the European Commission in 2025, the revised directive aims to reflect developments in the tobacco market by extending its scope to products such as e-cigarettes, heated tobacco and nicotine pouches. These would be subject to new minimum taxes adjusted to Member States’ economic conditions. The proposal also seeks stronger controls on raw tobacco to prevent diversion into the illicit supply chain. Under the special legislative procedure, the Council must adopt the proposal unanimously after consulting the European Parliament. (mp/ll)