Cyprus, which holds the six-month presidency of the Council of Europe from January to June this year 2026, has been consulted on the Commission’s proposed tax increase on tobacco and related electronic products, which has led through the European Parliament to maintain the current levels.
The Commission’s attempt to increase the price of a packet of 20 cigarettes from €4 to over €7 has been met with strong opposition in the European Parliament from libertarian supporters from member states and has forced the Commission to partially back down. The Cyprus presidency of the Council of Europe, which needs to unanimously approve the final provisions, has maintained the tobacco tax so that a packet will continue to cost at least €4.
The revised outcome of the Tobacco Products Directive (TPD) will come into force in January 2028 and will be drafted in 2027. The second half of 2027 for which the European Tobacco Products Directive is scheduled to be finalised will see the presidency of the Council of Europe controlled by Greece which has a strong tobacco industry and tobacco agriculture.
Following the current presidency of Cyprus however for July the presidency of the Council of Europe will be taken over by Ireland for the rest of 2026 which has the highest tobacco taxes of all the EU – harmonised with those in the United Kingdom where a packet costs at least 13 pounds (= 15 €) as much as it costs in Ireland from 15 €. The tobacco industry magazine Tobacco Asia reports that:
” A revised draft plan to raise tobacco taxes across the European Union has been scaled back after opposition from several member states, lowering the proposed minimum cigarette tax to €4 per pack.
A draft proposal to increase tobacco taxes across the European Union has been scaled back after several member states pushed back, according to a document obtained by The Examination.
The European Union currently sets a minimum tax of €1.80 per pack of 20 cigarettes but does not require minimum rates for newer nicotine products. Some countries, including Ireland, France, and the Netherlands, impose taxes well above that threshold, while others, such as Bulgaria, Croatia, and Cyprus, apply lower rates.
In July, the European Commission proposed raising the minimum cigarette tax to €4.30 per pack and introducing new minimum taxes for e-cigarette liquids and heated tobacco products. The bloc last raised the cigarette tax rate in 2011, and the increase took effect in 2014.
The Council of the European Union, which represents all 27 member states and must unanimously approve the final measure, has since revised the proposal. Denmark, which previously held the council’s rotating presidency, drafted an updated version in November.
Cyprus now holds the presidency and has introduced a new draft that lowers the proposed minimum cigarette tax to €4 per pack. The revised document states: “Most delegations express the concern that the proposed rates are significantly higher than the current rates applied for cigarettes.”
The Cyprus draft also recommends giving countries 4 years to implement higher cigarette taxes rather than requiring immediate adoption. It lowers suggested minimum rates for heated tobacco sticks and e-cigarette liquids compared with earlier versions. For example, the draft sets a proposed minimum of €2 per pack of 20 heated tobacco sticks, below the €2.16 suggested by the commission and the Danish presidency. It also cuts the recommended tax on high-concentration e-cigarette liquids to 20% of retail price, down from 40% in earlier proposals.
A spokesperson for the Cyprus presidency described the draft as an “effort to bridge diverging views amongst member states” and said officials have “worked hard to enable discussions to move forward with the aim of achieving consensus.” The spokesperson added that a revised proposal will appear in the coming weeks. A commission spokesperson declined to comment on the leaked document, which remains confidential.
The tobacco industry has opposed the commission’s proposed cigarette tax rate and has argued that heated tobacco and nicotine products should face lower taxes than cigarettes because they cause less harm. Nathalie Darge, director general of Tobacco Europe, said the commission’s plan “risks being disproportionate and could undermine legitimate markets while fueling illicit trade.”
Working drafts prepared by the Cyprus and Danish presidencies include input from member state delegations. If officials adopt the directive in 2027, it would take effect in January 2028.
Further changes remain likely. The council presidency rotates every 6 months. Ireland, which assumes the role in July and has the EU’s highest tobacco taxes, may push for stricter rates, while Greece, which has a large tobacco industry, will lead the council in the second half of 2027, when many observers expect officials to finalize the directive.
Earlier drafts from the commission and the Danish presidency also proposed eventually applying the same tax rate across all tobacco categories, in line with World Health Organization recommendations. The Cyprus draft removes that provision.
Cyprus maintains one of the bloc’s lowest tobacco tax rates. Last fall, kiosk owners urged lawmakers to seek an exemption from the directive, arguing that higher taxes could force small businesses to close, reduce revenue, and increase illicit cigarette sales. The tobacco industry has raised similar concerns in opposing tax increases. “
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