The European Commission is preparing a sweeping overhaul of tobacco taxation that could see cigarette prices across the EU soar by more than 50% within three years — a move that’s already sparking strong political backlash.

According to a draft directive discussed during last week’s EU Finance Ministers’ Council (Ecofin), the Commission plans to raise the minimum excise duty on cigarettes by 139% starting in 2028, from €90 to €215 per 1,000 cigarettes.

That would push the average retail price of a 20-pack in Cyprus to €7 or more, unless tobacco companies absorb part of the cost.

The proposed reform extends beyond traditional cigarettes. Heated tobacco products would see their minimum excise duty rise from €88 to €155 per 1,000 units, while e-liquids for e-cigarettes would jump from €0.10 to €0.36 per milliliter — a more than threefold increase.

The European Commission argues the revision — the first in 15 years — is primarily aimed at protecting public health and aligning tax rules with modern tobacco products. Yet officials acknowledge the measure could also generate new EU-wide revenue streams, as the bloc seeks fresh funding sources amid budgetary pressures.

Notably, an internal document revealed earlier this year that Brussels wants excise duties to become European, not national, revenues, a shift that would centralize tobacco tax income at the EU level.

The proposal has ignited a political backlash from Southern European states.

Greece warns the plan could fuel smuggling, reduce national revenues, and undermine competitiveness at a sensitive economic moment, particularly amid trade uncertainties tied to new U.S. tariffs.

In response, Greece is proposing a longer transition period for implementing the new directive and has begun rallying support from Italy and Romania, who share similar concerns. Without compromise, observers say the dispute could escalate — potentially leading to a veto from dissenting member states.

While Brussels frames the move as a public health measure, critics see it as a “tax offensive” that risks deepening regional divides within the EU. Northern countries like France and the Netherlands support the hike, emphasizing health benefits and harmonization, whereas Southern economies warn of economic distortion and social inequality.