Portugal has become the latest country to revolt against the EU’s planned 139% tobacco tax hike, joining Greece, Italy, and Romania in warning it could do more harm than good. Aiming to pump €11.2 billion a year into the EU’s coffers, the proposal has sparked outrage in Lisbon over fears of booming black-market trade and unfair rules that lump nicotine pouches and e-liquids in with regular cigarettes.
The Portuguese government expressed “strong concerns” about the planned tax hikes—incorporated in the next 7-year EU budget starting in 2028—both because of the expected revenue loss due to the growth of black-market sales, as well as the fact the EU Commission plans to treat so-called New Generation Products (NGPs), such as nicotine pouches or e-liquids, the same as traditional cigarettes.
According to the calculations of Euractiv, the planned tax hikes would increase cigarette prices across the EU by an average of 18%—or nearly €1 per pack—but poorer countries, where tobacco is relatively cheaper, could see much larger hikes.
In Portugal, the proposed taxes would increase prices by €1.22, or 24%, which could create a major boom of contraband and counterfeit products on the market, translating to a substantial net revenue loss for the state.
According to Lisbon, the proposal would result in a loss of national tax revenue of up to €1.5 billion, which “naturally, cannot be accepted under the current conditions.”
This corresponds with the arguments put forward by industry representatives, who’ve been warning that higher taxes could do more harm than good.
“The Commission’s approach overlooks real-world evidence: high excise rates have shown little success in reducing smoking prevalence, fuelled illicit trade, negatively impacted [tax] revenues, and impoverished EU consumers,” Cyril Lalo, the Head of EU Engagement at Imperial Brands, told europeanconservative.com last week.
The other countries that oppose the change would also see larger price hikes than the EU average. Greece would be among the worst-hit with nearly 38%, while a pack of cigarettes would be 23% more expensive in Italy and 19% more expensive in Romania.
Others may also raise their objections in the coming weeks, including Bulgaria (with a whopping 60% projected price increase), Croatia (36%), Luxembourg (33%), Slovenia (32%), Slovakia (23%), Spain (20%), and Lithuania (20%).
Since both the EU budget and the Tobacco Excise Duty (TED) revision need the unanimous approval of all member states to be adopted, Brussels is facing a difficult fight over the next two years.
Furthermore, the Portuguese government also questioned the motivation behind the higher taxes on NPGs—nicotine pouches, e-liquid vapes, and heated tobacco products—arguing that if reducing harm is the goal, these products should benefit from lower taxes rather than being treated the same as regular cigarettes.
“Since taxes are a form of disincentive, we believe that less harmful forms of smoking should be subject to lower taxes to encourage smokers to switch to these products,” the statement noted.
