Revision Of The European Directive On Tobacco Excise Duties: What Are The Consequences For Belgian Consumers And Merchants?
The taxation of tobacco is largely decided at the national level, but within a framework set by the European Union. This framework, Directive 2011/64/EU, is based on minimums established in 2010 and has never been revised since. In July 2025, the European Commission proposed a comprehensive reform. What is the status of this file, and what could it change for Belgium? Preliminary reminder: tobacco products are harmful to health and are reserved for adults. This article only addresses the economic and regulatory framework.
The current framework: minimum standards that have become less binding.
The current directive sets minimum rates that each member state must comply with. For cigarettes, the total excise must reach at least 60% of the weighted average selling price and a minimum of 90 euros per 1,000 cigarettes. For fine-cut tobacco intended for rolling cigarettes, the threshold is 50% of the weighted average price or 60 euros per kilogram.
These amounts are not indexed to inflation, and most countries, including Belgium, now tax well beyond these levels. Price differences between member states remain significant, fueling cross-border purchases. Furthermore, the directive does not cover products that have emerged since, such as heated tobacco, e-cigarette liquids, or nicotine pouches.
What the Commission proposes
Presented on July 16, 2025, the reform proposal pursues three objectives: raising the minimums, expanding the scope, and strengthening the fight against illicit trade. The main changes proposed are as follows:
- cigarettes: a minimum raised to 215 euros per 1,000 units, with a minimum excise share increased to 63% of the weighted average price;
- fine cut tobacco: 62% of the weighted average price or 215 euros per kilogram, which is more than three times the current minimum;
- heated tobacco: 55% of the selling price or 108 euros per 1,000 sticks;
- electronic cigarette liquids: 20% or 40% of the selling price depending on nicotine content, with minimum amounts per milliliter;
- nicotine pouches: 50% of the selling price or 143 euros per kilogram.
The Commission also proposes to adjust the minimums according to the general price level of each country and to update them every three years. A second text extends electronic monitoring of excise goods to raw tobacco.
A blocked file
In tax matters, European decisions require the unanimity of member states. This is where the problem lies. As of October 2026, the reform remains blocked in the Council, with several countries expressing reservations, particularly regarding the treatment of new nicotine-based products.
The European Parliament, which is only consulted, has not been able to exert influence. On June 17, 2026, the plenary rejected the text from its Economic Affairs Committee, which proposed a streamlined version, as well as the slightly amended proposal from the Commission. Therefore, no formal position has been adopted.
Meanwhile, the Commission is preparing a revision of the Tobacco Products Directive, which regulates packaging, flavors, and sales. The public consultation was closed in August 2026, and a proposal is expected by the end of the year.
For the Belgian consumer: an impact mainly indirect.
For cigarettes sold in Belgium, the new minimums would not change much in the short term. With a pack costing around 12 to 13 euros and one of the highest tax rates in Europe, the country already exceeds the proposed threshold by a large margin. Belgium has also already aligned the taxation of rolling tobacco with that of cigarettes and introduced an excise tax on e-liquids as part of its tobacco plan.
The most significant effect would come from neighboring countries. States where tobacco is taxed the least would be forced to raise their rates. This is particularly at stake for Luxembourg, where many Belgians buy their tobacco, especially since the adjustment according to price levels would result in a higher minimum in the more expensive countries. Rolling tobacco, which currently has a particularly low European minimum, would be the most affected: its floor would rise from 60 to 215 euros per kilo. To get an idea of the current formats and prices, the rolling tobacco offer from Capalus provides an overview.
For merchants: less leakage, more complexity.
For Belgian bookstores, gas stations, and specialized shops, a top-level harmonization would be rather good news. Lost sales to Luxembourg or the illicit market could partially return. However, the expansion to new products would involve new obligations: tax stamps, declarations, inventory tracking.
Conclusion
The revision of the tobacco excise directive will not be finalized until the twenty-seven reach a compromise. But the direction is clear: higher minimums, indexed, and extended to all tobacco and nicotine products. For Belgium, already heavily taxed, the main issue will be whether Europe can finally reduce the price gaps that fuel cross-border purchases.
