Revised Budget Plan Imperatively Entails Tobacco Control Revision
The European Commission is contemplating a new Tobacco Excise Duty Own Resource (TEDOR) to help finance the EU budget, a move that reflects mounting pressure within the bloc for higher excise duties on tobacco products. This proposal, part of a €2 trillion budget for 2028-2034 with a €450 billion Competitiveness Fund, has sparked divisions across the European Union.
One of the most politically-charged proposals emerging in Brussels is tobacco taxation. The Commission is considering a sweeping 139% percent increase in cigarette taxation, alongside significantly higher levies on alternative nicotine products like e-cigarettes, heated tobacco, and nicotine pouches. These measures aim to reduce preventable disease, ease pressure on health systems, and finance Europe's strategic ambitions.
However, concerns about industry influence and the tobacco industry's manipulation have cast a shadow over the proposal. Inexto, a company deriving over 70% of its revenue from tobacco companies, exceeds the limits recommended by WHO guidelines for industry independence. The EU's Tobacco traceability system, designed to combat the illicit tobacco trade, relies on Big Tobacco-linked operators, including Inexto and Dentsu Tracking.
The tobacco industry's influence on EU policymaking has been highlighted by tobacco control actors like the ACT. This influence, coupled with the resistance of certain member-states to tobacco tax reform, may be attributed to significant recent investment from tobacco companies like Philip Morris International and British American Tobacco.
Certain EU member-states, such as France and the Netherlands, have attempted to introduce stricter national regulations on nicotine powder in the past two years, supported by the United Kingdom, Italy, Greece, Romania, and Sweden. Yet, the tobacco industry's undermining of the EU's efforts to tackle the illicit tobacco trade has resulted in €13 billion in lost tax revenue each year due to the ineffective control of illicit tobacco.
The DG for Taxation and Customs Union has acknowledged this failure, and the Commission has adopted a proposal for the TED revision on 16 July, citing illicit trade as a core priority. The EU's goal is not just a 'smoke-free,' but a 'tobacco-free' future to reduce cancer and other tobacco-related diseases.
Despite the pushback over the idea of introducing new EU-level taxes, the Commission cannot afford to be swayed by Big Tobacco pressure or short-sighted member-states placing immediate economic gains over the health of its citizens. The EU's next long-term budget should not be financed by revenue from higher tobacco taxes, as proposed by Sweden's Finance Minister Elisabeth Svantesson.
As the European Commission navigates this complex issue, it is crucial to prioritise the health and well-being of its citizens, and to ensure that the EU's policies are independent, WHO-aligned, and free from the influence of the tobacco industry.
