Tobacco taxes and big business: how Brussels wants to finance EU budgets
The EU proposes to collect tobacco taxes directly, depriving Member States of part of the tax revenue. Possible increases of up to 139% on cigarettes and impacts on the economy
by Marco Mobili
3' min read
3' min read
Bigger budgets to be able to repay New Generation Eu loans. How? The idea under consideration by the European Commission is unprecedented. Among the new hypotheses for more revenue to be allocated to the EU budgets now crops up is that of using the extra revenue generated by increased taxation on tobacco and all smoking products. In essence, for the first time, part of the tax revenues from cigarettes, heated tobacco and nicotine products would no longer end up in the coffers of the Member States, but directly in the EU budget. In practice, it would be Brussels that would collect the revenue, taking it away from the national governments.
Speculation on possible new own resources in the new EU Budget for 2028-2035 could include new excise duties on tobacco and e-waste. This is according to sources in Brussels. The first part of the new Multiannual Financial Framework will go before the College of Commissioners next Wednesday, 16 July.
The debate on 16 July
The idea is on the table and the date is already set for Wednesday 16 July when the European Commission will present an official proposal on so-called 'own resources'. According to the hypotheses being studied, 'new sources of own resources could be developed where appropriate, for example through tobacco taxes'. The dossier is being dealt with at the highest level in Brussels and there would be no involvement of the other commissioners. Moreover, the internal consultation would have lasted just 24 hours, time in which officials would have had to analyse a 100-page text with significant impacts on agriculture, industry, public health and state finances.
The risks for national governments
.The proposal is bound to spark a strong debate also because according to the first conservative estimates, the share that Brussels would like to allocate to EU budgets would amount to EUR 15 billion. A sum that would in fact be taken away from national governments and end up directly in Brussels' coffers.
The assumed increases
.Already in recent days, the hypothesis of a revision of the taxation of tobacco and nicotine products, proposed by an internal Brussels document and anticipated by Il Sole 24 Ore.com, had generated strong perplexity. The proposal foresaw increases for cigarette taxation of up to 139%; for shredded tobacco up to 258%; for cigars a +1090%, without even sparing the new generation products (heated tobacco, electronic cigarettes, nicotine sachets). For Italian consumers, this would translate into a price increase of more than 20% (well over 1 euro per packet in the case of both cigarettes and heated tobacco products). According to the estimates of the European Union itself, these increases would lead to an increase in inflation of more than half a percentage point.
