EU finance ministers seek tobacco tax deal
EU finance ministers will seek a compromise on revised tobacco taxation rules at Monday’s ECOFIN amid Swedish and Spanish reservations
EU finance ministers will meet in Brussels on Monday (9 November) at the ECOFIN Council meeting to seek a compromise agreement on the revision of the Tobacco Taxation Directive, with disagreements over nicotine pouches, traditional tobacco products and minimum excise duty rates still threatening a deal.
The proposed revision, presented by the European Commission in July 2025, aims to increase minimum excise duties and extend EU taxation rules to newer products, including e-cigarettes, heated tobacco and nicotine pouches.
Catherine Feore
Speaking ahead of the ECOFIN meeting, a senior EU official expressed cautious optimism.
“We do believe we are close to agreement, but there are still some issues under discussion, and contacts are ongoing,” the official said.
The negotiations remain politically sensitive, particularly for Sweden, where snus and nicotine pouches have strong cultural significance, and Spain, which has reservations concerning cut tobacco.
Catherine Feore
“There is the question of bringing the novel products within scope. Then there is the question of what we call particular member states' cultural sensitivities to traditional tobacco products that have been consumed in their country,” the official said. “I think it's again known that Spain has particular issues around cut tobacco.”
Another contentious issue concerns how minimum excise duties should increase across member states with different economic circumstances.
The compromise proposal includes a purchasing-power index intended to reflect national economic conditions, while allowing governments an alternative mechanism.
“If a member state deems that it's more appropriate in their specific national circumstances to use purchasing power, they can opt out of that approach and apply instead an upper 3% cap,” another official explained.
The flexibility is designed to accommodate national concerns while preserving the directive's public health ambitions.
Sweden's objections to proposed taxation levels for nicotine pouches remain particularly difficult. Asked whether a special derogation or revised rates could unlock agreement, the senior official declined to disclose negotiating details.“We are engaged in bilateral consultations with a number of member states who have outstanding issues, and I am not going to comment further on those.”
The Irish presidency is preparing a revised compromise text ahead of Monday's debate, following what officials described as significant progress in narrowing outstanding differences.
Nevertheless, EU taxation legislation requires unanimity, meaning any member state can block agreement.
“Ultimately, when it comes to unanimity files, you do have to find that consensus, that sweet spot,” the official said.
Catherine Feore