Malta’s refusal stood in the way of reaching an agreement on imposing new taxes on cigarettes and new nicotine products. The Irish Presidency’s compromise proposal secured a positive vote from the remaining 26 member states during negotiations held yesterday at the Council of Finance Ministers.
Makis Keravnos described the proposal as balanced, noting that it combines the necessary ambition with respect for the sensitivities of specific member states. The Irish Minister of Finance and current chair of ECOFIN appeared disappointed by the developments and expressed hope that an agreement would be reached in December, following consultations to be held in the coming period.
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What the proposal entails
With a phased implementation from 2028 through 2032, the proposal calls for an increase in the minimum excise taxes on cigarettes. The impact on consumers will depend, on the one hand, on the taxation imposed by each country and, on the other hand, on how the additional cost is passed on to retail prices.
Cyprus is among the member states permitted to extend the transition period for aligning with the new minimum tax rates until 2036. This provision was included in the compromise proposal currently under negotiation to limit sudden tax increases in countries that would otherwise require significant tax hikes.
These include Greece, Italy, Bulgaria, Spain, Romania, and Slovenia.
The proposal also includes the introduction of minimum tax rates on e-cigarette liquids, even when they do not contain nicotine.
Watch the report by Nasia Ioannou:
