Hermes welcomes the new progress made on the Tobacco Excise Directive

The Hermes Centre for European Studies welcomed on Saturday, May 29, the new progress made on the compromise text of the Cypriot Presidency concerning the Tobacco Excise Directive (TED), deepening the assessments already expressed in the position paper published at the beginning of this month.

The most recent sessions of the working group have led to the drafting of a fourth compromise text which, according to Hermes' assessment, strengthens the foundations for reaching an agreement on a reform that has eluded the European Union for over a decade. The direction taken is clear and encouraging. With the vote scheduled for June 3rd in the European Parliament's Committee on Taxation and the meeting of EU finance ministers set for June 12th, the coming weeks will be crucial for this issue.

When Hermes published its position paper on May 7, the Cypriot compromise already stood out from the European Commission’s initial 2025 proposal, which many member states had criticized for its overly centralised approach and for the disproportionate pace of tax increases between different product categories.

The fourth text goes even further by providing more precision, introducing more transparent mechanisms for adjusting excise duty rates and adopting a more differentiated approach to transitional periods, taking into account the specific realities of the different Member States at various stages of the tax convergence process.

"The fourth text confirms what we observed at the beginning of this month: this presidency is dealing with a particularly complex issue with pragmatism and a clear desire to find common ground between the Member States," said Giovanni Kessler, Chairman of the Hermes Scientific Committee and former Director General of the European Anti-Fraud Office (OLAF).

"With each revision, the text has gradually moved closer to what member states can reasonably accept. An agreement is now within reach," added Tiziana Demma, president of the Hermes Centre for European Studies.

A successful revision of the TED would constitute an important contribution to the European Union's public health objectives as well as to the integrity of the single market for tobacco and related products.

As negotiations continue, the Hermes Centre for European Studies will continue to assume its role as an independent voice in favor of pragmatic, fiscally sustainable European policies capable of meeting the needs of all Member States.