EU Faces Backlash Over Tobacco Tax Reforms

Portugal has become the latest EU member state to officially oppose the European Commission’s proposed reforms to the Tobacco Excise Tax Directive (TED) – especially the one calling for a sharp increase in minimum tax rates. According to Portugal, this will drive consumers to the illicit market, reports The European Business Review.

In addition to these reforms, the Commission plans to implement a new revenue stream to help finance its 20282034 budget. Unveiled in July, the budget blueprint includes the contentious Tobacco Excise Duty Own Resource (TEDOR), which calls for 15% of member-state tobacco tax revenues to be redirected to the EU budget. Portugal claims that this measure could strip €1.5 billion from its coffers.

Portugal’s opposition to the TED and TEDOR proposals is part of a growing trend, with Greece, Italy, Sweden and Romania also making their objections clear.

According to Euractiv, the planned 139% tobacco tax hike would raise cigarette prices EU-wide by an average of 18%, with far steeper rises in lower price markets.