The European Commission is preparing to mandate a bloc-wide minimum excise tax on vaping products and heated tobacco. According to a leaked draft report obtained by the Financial Times, this overhaul of the Tobacco Excise Directive (TED) aims to drastically reduce smoking rates and curb the appeal of novel nicotine products among youth across the European Union.
The proposed legislation is a cornerstone of the EU’s Beating Cancer Plan. Health officials hope to drive tobacco use among EU citizens down from the current 25 percent to 20 percent by 2025, ultimately achieving a “tobacco-free generation” (below 5 percent) by 2040.
To achieve this, the Commission plans to harmonize the taxation of novel products with traditional cigarettes. These proposed minimums will act as a “floor,” allowing individual member states to impose higher rates, but preventing them from dropping below the EU standard.
| Product Category | Proposed Minimum EU Tax Rate |
|---|---|
| Cigarettes | €3.60 per pack of 20 (Doubled from €1.80) |
| Vapes (“Stronger” Nicotine) | 40% wholesale duty |
| Vapes (“Lower-Strength”) | 20% wholesale duty |
| Heated Tobacco | 55% wholesale duty (or €91 per 1,000 items) |
The specific mechanics of the vape tax remain confusing to industry experts. The draft suggests taxing products based on nicotine strength, but the EU already strictly limits maximum nicotine concentrations to 2 percent (20 mg/mL) under the existing Tobacco Products Directive (TPD).
Industry advocates, including the Independent European Vape Alliance, warn that heavy taxation on novel products could discourage smokers from transitioning to less harmful alternatives. Conversely, health experts argue the price hikes are crucial, noting the cigarette tax alone is expected to generate an extra €9.3 billion for member states.
Final details of the proposal are expected in December. However, unlike standard EU laws, the TED requires unanimous approval from the Council of the EU. Because any single member state can veto the proposal, its passage remains highly uncertain.
