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REPORT (COM(2025)0580 – C100207/2025 – 2025/0580(CNS))

On the proposal for a Council directive on the structure and rates of excise duty applied to tobacco and tobacco related products (recast)

A-10-2026-0161

Committee on Economic and Monetary Affairs · Rapporteur: Tomáš Kubín

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Parliament's amended version of the proposed Council directive on excise duty for tobacco and related products sets new minimum rates and structures, with transitional periods and adjustments for inflation and price levels. It redefines product categories, aligns definitions with other EU acts, and introduces rules for heated tobacco, nicotine pouches, and e-cigarette liquids. The text emphasizes gradual implementation, protection of SMEs, and consideration of illicit trade and public health impacts.

Committee position. The Committee on Economic and Monetary Affairs proposes to approve the Commission proposal with amendments that lower some minimum rates, extend transitional periods, and adjust indexation mechanisms.

Key points

  1. Cigarettes: overall excise duty at least 60% of weighted average retail price, not less than EUR 200 per 1000 cigarettes, with an alternative rate of EUR 250.
  2. Cigars and cigarillos are treated as one category; transitional rates from 2028 to 2031 and 2032 to 2033 are set, with a review of impact on SMEs by 2028.
  3. Heated tobacco: per-item taxation based on tobacco content; transitional rates lowered and extended to 2033.
  4. E-cigarette liquids: uniform minimum of 30% of retail price or EUR 0.30 per ml, regardless of nicotine content.
  5. Nicotine pouches and other nicotine products: minimum rates set for 2030 and 2033, with lower percentages and amounts than proposed.
  6. Inflation adjustment uses core inflation (excluding energy and unprocessed food) with a cap of 9%, and applies from 2036.
  7. Price level index weight in calculating minimum rates is increased to two-thirds.
  8. Transitional periods extended to six years for several products, with increases after three years.
  9. Definitions of products are aligned with other EU acts, and raw tobacco is defined as harvested and dried tobacco that has undergone initial processing.
  10. Exemptions for medical products and destruction under administrative supervision are allowed.
  11. Commission reports must monitor illicit trade, employment, and regional disparities.

Who is affected

  • Manufacturers and importers of tobacco and nicotine products face new excise duty rates and structures.
  • Small and medium-sized enterprises producing cigars, cigarillos, or nicotine pouches receive transitional support and impact assessments.
  • Member States must implement new minimum rates and adjust national laws, with flexibility for price level differences.
  • Consumers may see price changes for tobacco and nicotine products due to new excise duties.

Figures and deadlines

  • 60% of weighted average retail price for cigarettes, EUR 200 per 1000 cigarettes, EUR 250 alternative.
  • EUR 0.30 per millilitre for e-cigarette liquids.
  • 9% cap on inflation adjustment.
  • From 1 January 2036, inflation adjustment applies.
  • Transitional periods until 31 December 2031 and 2033 for various products.
  • Two years from entry into force for Commission assessment on cigars and cigarillos.

Legal basis: Article 113 of the Treaty on the Functioning of the European Union