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Cigarette Taxes in Europe, 2025

5 min readBy: Adam Hoffer, Jacob Macumber-Rosin

Cigarette smokers in the European Union pay far more in excise taxes than they do for the cigarettes themselves. The EU Tobacco TaxA tax is a mandatory payment or charge collected by local, state, and national governments from individuals or businesses to cover the costs of general government services, goods, and activities. Directive requires all Member States to levy a minimum excise taxAn excise tax is a tax imposed on a specific good or activity. Excise taxes are commonly levied on cigarettes, alcoholic beverages, soda, gasoline, insurance premiums, amusement activities, and betting, and typically make up a relatively small and volatile portion of state and local and, to a lesser extent, federal tax collections. on cigarettes and other tobacco products. EU countries levy a specific ad quantum cigarette tax (a fixed amount per cigarette) and an ad valorem excise tax (an additional percentage of the retail sales price).

The current minimum cigarette excise rates in the EU are €1.80 ($2.12) per 20-cigarette pack, and the minimum total excise duty is at least 60 percent of the national weighted average retail price. The minimums have remained the same since 2014, but the Tobacco Tax Directive is expected to be updated soon. Member States that levy a higher specific rate of at least €2.30 per pack do not need to meet the 60 percent requirement. The two excise taxes are levied before adding the broadly applied value-added tax (VAT).

The EU Directive only establishes minimum rates, but all countries levy higher rates.

This map illustrates the wide variance in cigarette excise taxes across EU Member States. The highest tax in the EU is levied in Ireland at €10.71 ($12.64) per pack of 20 cigarettes, followed by France at €8.09 ($9.55) and the Netherlands at €7.77 ($9.17). The lowest excise tax per pack of 20 cigarettes is levied in Bulgaria at €2.03 ($2.39), followed by Croatia at €2.63 ($3.10) and Cyprus at €2.64 ($3.12).

 

Data compiled by Adam Hoffer and Jacob Macumber-Rosin

Changes from 2024

  • Ireland increased the excise duty on a pack of 20 cigarettes by €0.79.
  • Latvia increased the excise duty on a pack of 20 cigarettes by €0.67.
  • France increased the excise duty on a pack of 20 cigarettes by €0.64.
  • Poland increased the excise duty on a pack of 20 cigarettes by €0.60.
  • Belgium increased the excise duty on a pack of 20 cigarettes by €0.52.
  • Sweden increased the excise duty on a pack of 20 cigarettes by €0.48.
  • Estonia increased the excise duty on a pack of 20 cigarettes by €0.34.
  • Finland increased the excise duty on a pack of 20 cigarettes by €0.32.
  • Luxembourg increased the excise duty on a pack of 20 cigarettes by €0.29.
  • Many other countries increased the excise duty on a pack of 20 cigarettes by less than €0.25.

The excise taxes are levied in addition to the VAT applied to cigarettes.

EU Average Tax Types and Rates on a Pack of 20 Cigarettes as of July 2025

TaxAverage Rates and Prices
Base Market Price (excluding taxes)€1.17
+ Excise duty (minimum 60% of RSP)€4.14 (64.0% of RSP)
= Pre-VAT Price€5.31
+ VAT€1.16 (17.9% of RSP)
= Retail Selling Price (including all taxes)€ 6.47
Source: European Commission Taxation and Customs Union; author’s calculations.

Considering the total taxes, the average tax share of weighted average retail prices in EU countries ranges from 67.8 percent in Germany to 91.6 percent in Finland. The data are calculated and published by the European Commission using weighted average prices (WAP) from the previous years, pursuant to Article 8 (Subsection 2) of the Tobacco Tax Directive.

Cigarette taxes are regressive because smoking is more prevalent among people with lower incomes. The narrow base and declining consumption trend make cigarette excise taxes a volatile source of revenue. Cigarette tax increases tend to invite cigarette smuggling and drive consumers to illicit markets.

KPMG estimates that more than 35 billion counterfeit and contraband cigarettes were consumed in the EU in 2023—amounting to 8.3 percent of total cigarette consumption and a loss of €11.6 billion ($13.7 billion) in tax revenues. The largest markets for illicit cigarettes as a percentage of total consumption were in France (33 percent), Ireland (28 percent), and Greece (24 percent). France accounts for almost half of illicit consumption in the EU.

Major updates to the EU Tobacco Tax Directive have been considered but were put on hold in 2022. In 2025, discussions of revising the Directive were revived, but nothing has been finalized. As cigarette smoking continues, and consumption of counterfeit and contraband cigarettes continues to grow, the European Commission may reconsider updates to the EU tobacco tax policy. Alternative tobacco products like vaping, snus, and heat-not-burn products can help smokers switch to less harmful products, and tax policy should take harm reduction into consideration.

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