On Wednesday 3 June, the Cyprus Presidency of the Council of the European Union withdrew the revision of the Directives governing tobacco taxation in the EU from the agenda of the Ecofin Council meeting in Luxembourg on Friday 12 June (see EUROPE 13879/23).
“We have exerted every possible effort to reach consensus within the EU Council” by presenting “a text which took into consideration the different and diverging positions of Member States”, commented the Cyprus Presidency on Wednesday evening, following discussions held at the Member States’ ambassadors to the EU (Coreper) level. “Regrettably, despite our efforts during the past months, it was not possible at this stage to reach consensus on this important file”, the Presidency added.
However, the Cyprus Presidency considers that significant progress has been made in recent months at a technical level and that its latest compromise proposal, which must be adopted unanimously by the Member States, is balanced.
On Wednesday, Sweden openly opposed the increase in the minimum level of taxation on snuff, set at €80 per kilo, under the Cypriot compromise proposal. Sweden considers the proposed level of taxation to be four times too high, while Finland, whose residents obtain their supplies from Sweden, has called for higher taxation than that suggested by the Cyprus Presidency.
“We’re going to stop the EU raising the tax on snuff!”, said Swedish Minister Elisabeth Svantesson, promising on X to defend “the interests of Swedes” as a priority, ahead of elections in Sweden in autumn.
Regarding the adjustment of minimum tobacco tax rates in line with national purchasing power, the additional option proposed by Luxembourg, namely a tax increase of up to 3% per category of tobacco products, was criticised by Germany.
Germany, Malta, and Hungary considered the minimum rates of excise duty applied to cigarettes to be too high, while Belgium, Finland, France, and the Netherlands warned against a further reduction in taxation, which would render the legislative revision meaningless.
Finally, Spain is of the opinion that the taxation of roll-your-own tobacco should not be aligned with that of cigarettes.
MEPs take a stand. On Wednesday, the European Parliament’s Committee on Economic and Monetary Affairs adopted its position on this reform, advocating taxation linked to the level of risk posed by tobacco products.
Concerning cigarettes, the draft report by Tomáš Kubín (PfE, Czech) maintains the threshold for taxation in relation to sales prices at a minimum of 60% as of January 2028, whereas the Commission has recommended a threshold of 63%. And, according to MEPs, excise duty on 1,000 cigarettes must not fall below €200, whereas the Commission has proposed raising this threshold from €94 to €215 per 1,000 cigarettes.
For rolling tobacco, according to MEPs, the minimum tax threshold would rise to 55% as of 2034, or at least €143 per kilo, whereas the Commission has proposed 62% as of 2032, or €215 per kilo.
“I believe a differentiated treatment of products according to their specificities, patterns of use and risk profiles is essential”, said Mr Kubín in a statement. In his view, “this is not about weakening the Commission’s objectives, it is about making the Directive workable in practice”.
The S&D Group condemned an alliance between the right, the conservatives and the far right that has resulted in a weakening of the Commission’s initial proposal, to the benefit of the tobacco multinationals.
“The Commission’s proposals were ambitious, but the EPP-far-right alliance stripped the reform of its purpose, reducing minimum tax rates, increasing transition periods, and watering down the mechanism that keeps the Directive relevant over time”, criticised Cesar Luena (S&D, Spanish) in a statement.
Parliament, which has only been consulted on this dossier, is expected to ratify its position on Wednesday 17 June. (Original version in French by Mathieu Bion with Camille-Cerise Gessant)