Smokers across Europe, including Cyprus and Greece, are facing an explosive rise in tobacco prices.
The European Commission is considering a proposal to radically increase taxes on cigarettes and alternative tobacco products, which, if approved, would come into force in 2028.
According to the draft discussed at a meeting of EU finance ministers, the special excise tax on tobacco products will increase by 139% - from 90 to 215 euros per 1,000 cigarettes. This means that in EU countries such as Greece or Cyprus, where today a pack of 20 cigarettes costs an average of 4.5–4.7 euros, the price could exceed 7 euros if manufacturers do not bear part of the costs.
No less changes will affect alternative types of smoking. The excise tax on heated tobacco is planned to increase from 88 to 155 euros per 1,000 units. For e-liquids, the tax will rise from 0.10 to 0.36 euros per milliliter.
The European Commission argues that the tobacco tax system has not been updated for more than 15 years, and new regulation should serve two purposes:
Reduce tobacco consumption and protect public health. Replenish the budgets of EU countries by increasing tax revenues.
According to analysts, Brussels' excise tax revenues could increase by billions of euros in just the first year of implementation of the updated directive.
However, not all states support the initiative in its current form. Greek National Economy Minister Kyriakos Pierrakakis said at the latest ECOFIN meeting that a sharp increase in taxes could hit the market and cause a surge in smuggling.
“We have already had a similar experience: when taxes rise too quickly, the illegal trade in cigarettes intensifies. This hits not only the budget, but also honest companies,” the minister noted.
He proposed extending the transition period to give businesses and consumers time to adapt to new conditions.
According to KPMG, in 2024 the share of smuggled cigarettes in Greece decreased to 17.5% of total consumption (versus 23.7% a year earlier). However, the state lost about 438 million euros in tax revenue due to illegal trade.
Experts warn that if taxes rise sharply, the underground market could become active again, especially in countries with high tobacco prices such as France, Ireland and Cyprus.
Source: omegalive.com.cy
