The European Economic and Social Committee (EESC) has cautioned that abrupt or excessive increases in excise duties on tobacco and nicotine products could drive consumers towards illicit markets, erode fiscal revenues, and ultimately weaken the EU’s public health objectives.
In an opinion adopted last week, the EESC, which is an advisory body meant to provide civil opinions to EU institutions, supports the revision of the Tobacco Taxation Directive but stresses the need for proportionate, gradual, and predictable reforms.
The opinion, drafted by rapporteur Matteo Borsani (Employers’ Group, Italy) and co-rapporteur Małgorzata Anna Bogusz (Poland), was approved during the EESC’s plenary session on February 18-19.
It recognises the European Commission’s July 2025 proposal to update the directive, which is from 2011, as necessary to address market shifts, emerging products such as heated tobacco and nicotine pouches, and the goals of Europe’s Beating Cancer Plan, which aims for a tobacco-free generation by 2040.
However, the EESC explicitly warns against “abrupt or excessive increases in excise duties, which risk fuelling illicit trade, undermining fiscal revenues and weakening public health outcomes”.
It recommends that any excise adjustments be implemented gradually and paired with robust enforcement measures, including enhanced customs cooperation, cross-border anti-smuggling initiatives, and improved monitoring systems.
The committee advocates a risk-proportionate approach to taxation, arguing that non-combustible and reduced-risk products should face lower duties than traditional combustible tobacco.
This aligns with the principle of “less harm, less tax” and seeks to encourage switching away from the most dangerous forms of nicotine use.
The opinion calls for clearer legal definitions—particularly for heated tobacco products—to distinguish them from cigarettes, alongside greater flexibility for member states in structuring excises (such as unit- or weight-based options) while respecting EU minimum levels.
Broader concerns about illicit trade have featured prominently in debates surrounding the directive’s revision.
The Commission’s proposal includes measures to extend monitoring to raw tobacco and strengthen controls against diversion into illegal channels, amid estimates that illicit trade already costs the EU billions in lost revenue annually.
Industry groups and some member states have repeatedly highlighted the risk that steep tax hikes could exacerbate smuggling and black-market activity, particularly in lower-income countries or border regions where price differentials already drive cross-border shopping.
In Sweden, consumer organisations supporting harm reduction have echoed these worries in an open letter to the government, urging it to resist EU proposals for harmonised nicotine taxes that they say fail to differentiate adequately between cigarettes and lower-risk alternatives like snus and pouches.
They argue that uniform high taxation could reverse Sweden’s success in achieving one of the EU’s lowest smoking rates through consumer shifts to smoke-free options, potentially increasing reliance on illicit or unregulated sources.
The EESC’s position can be seen as adding weight to calls for balanced reform as negotiations continue in the Council, where unanimity is required.
Tobacco is set to become a hot-button issue in the next legislature after the European Commission signaled it wants to pick up the fight against smoking and everything remotely related to it. https://t.co/iayPf2QXMv
— Brussels Signal (@brusselssignal) November 12, 2024
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