EHN welcomes the European Commission’s proposal to revise the Tobacco Taxation Directive

On 16 July 2025, the European Commission published its long-awaited proposal to revise the Tobacco Taxation Directive. 

Tobacco remains one of the leading causes of preventable death in Europe, claiming nearly 700,000 lives each year. In the WHO European Region, tobacco use is linked to 16% of all cardiovascular disease (CVD) deaths, an estimated 674,693 lives lost annually. The World Health Organization and public health experts agree that taxation is one of the most effective measures to reduce tobacco use. 

The release of the proposal was made possible following the adoption of the EU’s Multiannual Financial Framework for 2028–2034, which introduced Tobacco Excise Duty as a new own resource for the EU budget. Under this system, 15% of revenues from tobacco products, based on national minimum rates, will be allocated to the EU budget, generating an estimated €11.2 billion annually. This political breakthrough unblocked the revision process and enabled the Commission to publish both the legislative proposal and its impact assessment. 

Main developments

The revised proposal for a Directive aims to better align tobacco taxation with public health objectives through three key measures: 

• Increasing minimum tax rates to reduce disparities across Member States. Minimum rates would be adjusted to reflect each Member State’s economic conditions, based on general price levels. 

• Extending the scope of the Directive to include new products such as e-cigarettes, heated tobacco, and nicotine pouches. These products will now be subject to harmonised minimum tax rates. 

This revision is long overdue. Between 2018 and 2023, the market share of these products grew from 4% to 13%, attracting a new generation of users through flavours and device features that mimic smartphones. 

This is in line with EHN’s calls in its evidence-based position papers, which remain among the most progressive in the current policy landscape: 

• EHN 2019 paper on e-cigarettes examined cardiovascular risks, usage trends, and regulatory gaps. 

• EHN 2021 position paper on Heated Tobacco Products (HTPs) highlighted the cardiovascular harms of HTPs, which significantly increase heart rate and blood pressure, posing risks comparable to conventional cigarettes. 

• Improving controls on raw tobacco, which can be diverted into the illicit market. The proposal extends the use of the EU’s electronic system for monitoring excise goods (EMCS) to raw tobacco, enabling Member States to better detect and combat illicit trade and tax evasion. Currently, illicit trade costs the EU an estimated €13 billion annually, with up to 25% of cigarettes in some Member States originating from the illegal market. 

EHN position

The publication of this proposal represents a timely and necessary step towards stronger tobacco control in the European Union. The swift revision of other key pieces of legislation, namely the Tobacco Products Directive and the Tobacco Advertising Directive, remains equally urgent. 

While legislative efforts in past decades have contributed to falling smoking rates, outdated regulatory frameworks risk reversing this progress. Tobacco continues to impose a staggering burden, with an estimated societal cost of €779 billion per year across the EU. 

EHN, as a founding member of the Smoke Free Partnership, supports decisive action to reduce tobacco-related harm and improve cardiovascular health across the EU. The organisation also endorses the Smoke Free Partnership’s press release welcoming the Commission’s commitment to increasing taxes on tobacco and nicotine products. 

Next steps

1. The proposals will now be submitted to the Council of the EU for agreement, and to the European Parliament and the European Economic and Social Committee for consultation. 

2. Council negotiations are expected to begin in September 2025. 

3. Adoption could take place by the end of 2025, or in the second half of 2026 at the latest. As taxation directives require unanimity, all 27 Member States must approve. 

4. The revised Directive would apply from 2028, with a four-year transitional period for certain products to allow Member States to adapt. 

The package amends two existing EU laws: 

• Directive 2011/64/EU on the structure and rates of excise duty on tobacco

• Directive 2020/262/EU on the general arrangements for excise duty

Revision of the Tobacco Taxation Directive (proposal)