Why Is the EU Consulting Again? The Tax Debate Returns Despite Existing Expert and Public Input

As European policymakers prepare to overhaul tobacco taxation rules, a growing number of economists, public health experts and tobacco harm reduction advocates are warning that the European Union may be heading in the wrong direction. Proposed excise tax reforms targeting vaping products, nicotine pouches and heated tobacco products could weaken incentives for smokers to switch away from combustible cigarettes, undermine public health gains and potentially expand illicit markets.

The debate comes at a critical moment for European tobacco control. Smoking prevalence has continued to decline across the European Union over the past decade, falling from 28% in 2012 to approximately 24% in 2023, according to the European Commission’s own evaluation of tobacco legislation. However, progress has not been uniform. While some countries have achieved dramatic reductions in smoking, others continue to struggle with stubbornly high cigarette consumption.

At this point, the fact that one of the most important drivers behind these recent declines has been the growing availability of smoke-free nicotine alternatives is undeniable. Products such as e-cigarettes, nicotine pouches, heated tobacco products and Swedish snus have increasingly provided smokers with options that deliver nicotine without the toxic byproducts created by tobacco combustion.

This distinction sits at the heart of a new analysis published by the Tax Foundation, which argues that the European Commission’s proposed revisions to the Tobacco Excise Directive risk ignoring fundamental differences in product risk profiles. The report warns that taxing lower-risk nicotine products too aggressively could discourage smokers from switching and ultimately slow progress against smoking-related disease.

The principle is relatively straightforward. Public health experts increasingly acknowledge that people smoke for nicotine but suffer disease primarily because of the smoke. The Tax Foundation therefore argues that excise taxation should reflect relative risk rather than treating all nicotine products as functionally identical. According to the report, a well-designed tax system should reinforce public health objectives by encouraging movement away from the most harmful products rather than creating financial barriers that preserve cigarette consumption.

These concerns are not merely theoretical. A substantial body of evidence suggests that price differentials play a crucial role in influencing consumer behaviour. If safer alternatives become increasingly expensive due to taxation, smokers may be less likely to switch. Some former smokers may even return to combustible cigarettes if the economic advantages of lower-risk products disappear.

Sweden, a nation which, for obvious reasons, is rejecting the EU’s tax proposals, provides perhaps the clearest example of how risk-proportionate policies can influence smoking rates. And the contrast between Sweden and the broader European Union has increasingly become central to policy discussions. While Brussels continues pursuing ambitious goals such as a tobacco-free generation by 2040, the proposed regulations would make those objectives harder to achieve.

Adding to the controversy is a separate EU proposal that could allow Member States to tax nicotine products brought across borders by private consumers, even when those products were legally purchased elsewhere in the Union. The measure has sparked concern among supporters of the EU single market because it introduces a potentially unprecedented exception to existing rules governing personal cross-border purchases.

Under the proposal, a consumer could legally purchase nicotine pouches or snus in Sweden, pay all applicable taxes at the point of sale, and still face additional excise charges when entering a country where those products are prohibited domestically. This undermines the principles of free movement and creates confusion for consumers navigating increasingly fragmented nicotine regulations.

The Tax Foundation analysis also warns that this risk could extend to newer nicotine categories if taxes rise too rapidly. High excise burdens may push consumers toward unregulated sources, reducing product safety oversight while simultaneously eroding government tax revenues.

This growing debate has also coincided with Brussels launching a new public consultation process as part of its review of the Tobacco Products Directive and Tobacco Advertising Directive, inviting citizens, researchers, consumer groups and public health stakeholders to help shape the next generation of regulation.

Among the organisations contributing to the discussion is Italy-based Heated Community Hub (HCH), a non-profit group advocating for evidence-based tobacco harm reduction policies. HCH argues that while protecting young people from nicotine initiation must remain a central priority, policymakers should also pay closer attention to the experiences of millions of adult Europeans who have already moved away from combustible cigarettes.

Harm reduction advocates argue that these consumer experiences provide valuable real-world evidence that should not be overlooked as Europe redesigns its regulatory framework, reigniting the discussion around consumer representation in public health policymaking. This consultation represents an important opportunity to ensure that adult consumers are not excluded from policy discussions.

Most tobacco harm reduction supporters agree on several key principles. Youth access should be prevented through robust age-verification systems and enforcement measures. Accurate public information should communicate both the risks of nicotine use and the substantially greater harms associated with smoking. Regulation should remain proportionate to risk, while policymakers should carefully consider unintended consequences, such as illicit trade and reduced smoking-cessation rates.

The broader question facing Europe is whether nicotine policy will continue evolving around scientific evidence and comparative risk, or whether increasingly restrictive approaches will blur the distinction between cigarettes and products that expose users to far fewer toxicants. As the European Union moves closer to revising both its excise and product regulations, the outcome could shape smoking trends across the continent for decades. For tobacco harm reduction experts, the central message remains clear: policies designed to reduce smoking should make it easier, not harder, for smokers to move away from combustion.

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