The EU and Hermes Study Centre Support the Cyprus Compromise on the Revision of Tobacco Excise Duties Through a Position Paper
Brussels, 7 May 2026 – Hermes – European Study Centre expresses its full support for the compromise text developed by the Cypriot Presidency of the Council of the European Union regarding the revision of Directive 2011/64/EU, known as the Tobacco Excise Directive (TED). Hermes considers this text to be a solid, balanced, and sustainable basis for a strategic reform at the European level.
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Hermes – European Study Centrehighlights how the European Commission’s original 2025 proposal, although driven by commendable public health objectives, contained significant critical issues, particularly due to its centralised approach and extremely rapid and substantial tax increases across several product categories.
By contrast, the Cypriot Presidency’s compromise represents a pragmatic and consensus-oriented re
At the same time, the compromise proposed by the Cypriot presidency represents a pragmatic and consensus-oriented response among Member States, capable of reconciling European harmonisation with economic sustainability. Its main features include more gradual tax increases, extended transitional periods, a cap on automatic inflation-related adjustments, and a clearer differentiation between categories of nicotine-containing products.
“The compromise proposed by the Cypriot presidency represents a necessary balance between different requirements, avoiding ideological approaches and favouring a practical and sustainable vision of European tax policy,” said Giovanni Kessler, Chairman of the Scientific Committee of Hermes – former Director-General of the European Anti-Fraud Office (OLAF) and of the Italian Customs and Monopolies Agency (ADM). “It shows that Europe can adopt effective solutions without compromising economic stability or social cohesion.
”“This text introduces fundamental elements of predictability and gradualism, which are essential to ensure a stable regulatory environment conducive to investment,” added Giuseppe Tanga, Director of Hermes – European Study Centre. “A balanced approach not only makes it possible to pursue public health objectives, but also to protect production chains and reduce the risk of market distortions, including illegal activities.
”Hermes stresses that excessively abrupt fiscal measures risk creating distortive effects on the real economy by affecting demand, production chains and employment. Although regulated, the tobacco sector continues to represent an important component of many European economies.
Particular attention is also given to the strategic role of tax revenues, which can help support the European Union’s common priorities, such as strengthening defence capabilities and strategic autonomy, through more stable and predictable resources over time.
Hermes – European Study Centre hopes that Member States will recognise the value of this balance and translate it into a concrete and sustainable agreement.
