By Timothy S. Donahue
Top Takeaways:
- Revenue drop: Netherlands collects €2.55B in 2025 tobacco excise, down from nearly €3B
- Behavior shift: Smoking rates decline, but cross-border purchases rise sharply
- Market signal: Higher taxes drive volume down—not revenue up
The Netherlands is seeing a familiar outcome of aggressive tobacco tax policy: less smoking, but also less revenue. New preliminary data from Statistics Netherlands shows that tobacco excise duty brought in €2.55 billion (US$3 billion)in 2025, down from nearly €3 billion the year prior, despite a series of steep tax increases.
Since 2020, the excise duty on cigarettes has doubled, with the minimum tax on a pack of 20 reaching €7.81 last year. Over the same period, excise on smoking tobacco nearly tripled—from just over €114 per kilogram to about €374.
So far, those increases have not resulted in higher government revenue. Instead, they appear to be accelerating shifts in consumer behavior. Smoking rates continue to decline, reports the NL Times. In 2015, about one in four people aged 12 or older reported smoking occasionally. By 2025, that share had fallen to roughly one in six.
Daily smoking has also declined, from 18% a decade ago to 12% in the past year. At the same time, consumers are finding alternatives—both legal and otherwise. Cross-border purchasing has increased significantly, according to earlier CBS research. In 2024, 12% of smokers said they “often or always” bought tobacco abroad, more than double the 5% reported in 2020.
The broader shift is even more pronounced. More than 40% of smokers said they sometimes buy tobacco outside the country, up from about a quarter just a few years earlier. That trend reflects price differentials with neighboring markets, where lower excise rates can make cross-border travel economically attractive.
CBS has also pointed to changes in product mix. Between 2021 and 2023, vaping uptake increased, suggesting that some consumers are moving away from traditional tobacco products altogether.
For policymakers, the data highlights a growing tension. Higher excise taxes are achieving public health goals by reducing smoking prevalence—but they are also eroding the tax base and shifting consumption across borders or into alternative categories.
