By Timothy S. Donahue
Top Takeaways:
- New Compromise: EU negotiators have circulated revised tobacco tax legislation.
- November Target: Ireland is seeking agreement among finance ministers Nov. 9.
- Final Hurdle: Sweden remains opposed, and adoption requires unanimous support.
The EU’s tobacco tax overhaul is moving forward, even if Sweden isn’t ready to come along.
The Irish presidency of the Council of the European Union has circulated revised proposals to raise minimum cigarette excise duties and to introduce EU-wide taxes on nicotine pouches, vaping liquids, and other products as negotiators prepare for another round of talks next week.
Two compromise texts dated Oct. 21 are set for discussion at the Council’s Working Party on Tax Questions meeting on Monday, Oct. 26. According to diplomatic reporting, Ireland hopes to secure a political agreement at the EU’s Economic and Financial Affairs Council (ECOFIN) meeting on Nov. 9.
The renewed push follows months of negotiations that stalled under the previous Cypriot presidency, largely due to disagreements over the taxation of smoke-free nicotine products. Sweden remains opposed to the proposed treatment of oral nicotine products and has reportedly said it is not prepared to approve the latest legislation.
However, Ireland has continued working toward an agreement. “A priority for the Irish Presidency is pursuing agreement among Member States on the Tobacco Tax Directive,” Irish Finance Minister Simon Harris told parliament in July.
Harris said Ireland would “aim to bring the file to ECOFIN when appropriate,” while emphasizing that unanimous support would be required.
The European Commission’s original proposal, introduced in July 2025, would raise the minimum cigarette excise from €90 to €215 per 1,000 cigarettes, an increase of about 139%. The overhaul would also set minimum duties for heated tobacco, nicotine pouches, e-cigarette liquids, and other nicotine products.
Those figures reflect the Commission’s original proposal. The exact rates in the latest Irish compromise have not been publicly confirmed.
The revised directive would set minimum excise requirements rather than uniform retail prices across the bloc. Member states would remain free to levy higher taxes.
Sweden has consistently argued that tax policy should distinguish between combustible tobacco and smoke-free nicotine products. Traditional Swedish snus remains outside the scope of the proposed directive under Sweden’s EU accession arrangements, but tobacco-free nicotine pouches would be subject to harmonized minimum taxation.
“We’re going to stop the EU raising the tax on snuff!” Swedish Finance Minister Elisabeth Svantesson said in June, when Stockholm rejected an earlier compromise.
The latest negotiations follow Sweden’s September election, which complicated the country’s ability to set a negotiating position. Coalition talks have continued into October, leaving the country under a caretaker government.
The Commission argues that modernizing tobacco taxation would reduce disparities among national markets, strengthen controls against illicit trade, and address newer nicotine products not covered by existing EU excise rules.
Ireland’s latest compromise marks another step toward a possible agreement, but not a breakthrough. EU tax legislation requires unanimous approval from all 27 member states, and Sweden could still block adoption by voting against the proposal.
Finance ministers could consider the legislation in November if sufficient progress is achieved during the upcoming negotiations.
