Cyprus and its rotating presidency of the EU in the Council of Europe, lasting until June this year, is striking a balanced compromise to the proposed with pressure on behalf of the European Commision increases in tobacco tax across EU member states. The minimum price of a pack of 20 cigarettes across EU member states can be found in Greece and Cyprus where it costs €4 and can rise up to €5.90c, but the European Commision has exerted pressure for it to start at €6.50c or even €7 and higher in many other European countries.
The issue of tobacco tax has been fiercely debated in the European Parliament where significantly higher taxes have been rejected by libertarian and right-wing political party coalitions. Upon assuming the EU rotating presidency which rotates among member states every 6 months, Cyprus has initially stagnated the tobacco tax making use of its vote in the Council of Europe (full story) which has to be unanimously agreed upon, and is now coming up with a further rationale and compromise that indicates that the price of tobacco should rise depending on inflation rather than inflating the tax behind it which artificially inflates the price as a consequence. With its draft, Cyprus upholds that ;
- Inflation-related tobacco tax increases should come with limits;
- Implementation of tobacco tax increases should be phased over time and not be decided abruptly;
- Member states should have greater independent control and especially on novice products.
Also referring to Ireland which takes the presidency over from Cyprus this July, the tobacco industry journal “Tobacco Asia” reports that ;
The approach aims to balance competing priorities across the bloc. While it still raises tobacco taxes and expands the directive’s scope, it avoids the sharp, immediate increases that previously triggered resistance. Early reactions from member states suggest cautious optimism that the plan could attract broader support. Unanimity remains the central challenge. EU tax policy requires approval from all 27 member states, giving each government veto power and making compromise difficult. Timing also adds pressure. Cyprus has until the end of its presidency this summer to secure progress. If negotiations spill over to the next presidency, where support for steeper tax hikes appears stronger, the debate could shift again and prolong the stalemate.
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