15 EU Finance Ministers Urge Rapid Reform of Tobacco Taxes

Vienna/Brussels – Fifteen EU nations, including Austria, are calling on EU Commission President Ursula von der Leyen to promptly amend the tobacco taxation directive. In a letter obtained by APA, they pointed out that the existing regulation is inadequate to “address the significant challenges arising from ongoing developments and trends in the European tobacco market,” particularly concerning new products like e-cigarettes and nicotine pouches.

The current regulation is nearly 15 years old and establishes minimum tax rates to ensure uniform taxation of tobacco products across all member states. However, it does not yet encompass new tobacco products such as e-liquids. There is ongoing disagreement among EU countries regarding the regulation of these products, and discussions are underway about new minimum rates and tax categories. The letter also criticizes the EU Commission for excluding the reform of tobacco taxation from its 2025 work program.

Unfair competition due to national measures

Additionally, “the rise in smuggling, illegal trade, and the production of tobacco products, along with their detrimental health effects, must be addressed.” The lack of a sufficiently harmonized EU approach has resulted in member states implementing national measures, leading to uneven competitive conditions and market distortions, according to the letter. Consequently, there is an urgent need for a European legal framework.

Discussions in the Council in February 2025 revealed that nearly all countries were calling for a harmonized strategy and a relevant proposal from the EU Commission. “As finance and economic ministers from 15 EU member states, we express our profound disappointment that this has not occurred thus far, and we urge your Commission to take immediate action to update the directive,” stated the letter signed by Austria’s Finance Minister Markus Marterbauer (SPÖ) to the Commission President. (27.05.2025)