Modernising the EU Tobacco Tax Directive: Evidence for Long-Overdue Reform
The proposed revision of the Tobacco Tax Directive (TTD) is a timely step towards modernising the EU tobacco tax framework and safeguarding the internal market. Three HEPA policy notes provide supporting evidence on cigarette affordability and excise revenues, as well as tax enforcement and illicit trade.
Drawing on up-to-date data on taxes, revenues, and consumption, the notes present descriptive and visual evidence on recent developments. Uneven tax reform and the failure to adjust excise duties for inflation and income growth have increased cigarette affordability and eroded real revenues since the last revision. Recent EU data confirms that higher taxation does not systematically drive illicit trade; instead, effective enforcement and regulatory measures are key to securing fiscal and public health gains. The Polish experience further demonstrates that higher taxes, combined with robust supply-chain regulation and digital tracking, can reduce smoking prevalence while increasing revenues. Together, these findings provide strong support for the adoption and timely implementation of the revised TTD.