Brussels – The revision of the European directive on tobacco taxation is within reach of agreement, but the unanimity required to approve the new tax framework is still missing. This was one of the key outcomes of yesterday’s (9 November) Ecofin meeting, during which the finance ministers of the 27 Member States discussed the compromise put forward by the Irish Presidency of the Council of the EU. At the end of the discussions, 26 Member States expressed their support for the text, while Malta continues to oppose it, preventing the negotiations from being concluded.
The discussion centred on the Irish compromise proposal, which garnered progressively broader support compared with the initial positions. Finland and Estonia, which at the start of the proceedings were among the countries opposed to or critical of the text, eventually fell into line with the majority during the debate. Only Valletta remained on the sidelines. This situation leaves the Irish Presidency close to its objective, but without the possibility of formally adopting a general approach on the revision of the directive.
It is not just a question of procedure. European legislation on excise duties falls within the scope of tax matters on which the Council must act unanimously: the opposition of just one Member State is therefore sufficient to block the entire measure. “I regret that the Council was unable today to reach a final agreement on the revision of the Tobacco Taxation Directive,” said the Irish Minister for Finance Simon Harris, who chaired the meeting. The minister nevertheless highlighted the progress made, describing the compromise as “balanced” and assuring that the presidency will continue to work with the country that remains opposed, without reopening the negotiations as a whole. The aim is to return to the issue in December.
The review, which the European Commission proposed in July 2025 as part of the European Plan against Cancer, aims to update a regulatory framework that has remained largely unchanged since 2011. The nicotine market has changed significantly over the last fifteen years, with the proliferation of products that do not yet fall fully within the common excise duty system. The new framework aims to increase the minimum rates applicable to tobacco products, reduce tax disparities between Member States and extend the rules to include e-cigarettes, heated tobacco products and nicotine pouches. The proposal also provides for tighter controls on raw tobacco, to combat illicit trade and improve product traceability.
What is at stake concerns both the protection of public health and the functioning of the single market. Excessive differences in taxation between countries can encourage cross-border purchases and fuel illegal trade. At the same time, the increase in minimum taxes aims to make products that pose health risks less accessible. Harris emphasised this point in particular, referring to a public health emergency linked to nicotine consumption, vaping and tobacco.
European sources said that within the Irish Presidency and among Ecofin members, there is a prevailing sense of optimism about the possibility of reaching an agreement with Malta in the coming days through bilateral arrangements. The aim is to reach an agreement in time for the next Ecofin meeting in December, to conclude the matter during the Irish Presidency and before the next Multiannual Financial Framework (MFF) is finalised.
In addition to the dossier on excise duties, the ministers discussed several other economic and fiscal policy issues. The Council approved the recommendation authorising Italy to use the national safeguard clause under the new European fiscal rules, extending the flexibility already granted for defence expenditure to measures aimed at strengthening energy security. The measure takes into account the impact of the conflict in Iran on energy prices. It will allow a deviation from the agreed net expenditure paths, within the limits set out in the European framework.
Further measures to simplify VAT for online sales were also approved, aiming to make the collection of import duties more efficient and bring procedures into line with the customs union reform. Ministers also discussed the economic and fiscal impact of Russia’s war against Ukraine. They also took stock of the implementation of the Recovery and Resilience Facility, under which some 457.5 billion euros has been disbursed to date.
Finally, the Council adopted conclusions on the European Union’s statistical priorities. They also exchanged views on the impact of European legislation on businesses and public administrations, with a particular focus on efforts to simplify legislation.
English version by the Translation Service of Withub
