Politics
AI
Estonia Backs EU Tobacco Tax Plan But Demands Veto on Rates
Estonia's parliament endorsed a proposed EU directive to harmonize tobacco taxes, including for e-cigarettes, but formally amended its position to ensure the final authority to set tax rates remains with individual member states, not Brussels.
- —The European Union Affairs Committee of the Riigikogu (Parliament of Estonia) has approved Estonia's stance on a proposed EU Directive to standardize minimum excise duty rates for tobacco products, including new products like e-cigarette liquids.
- —Estonia supports the directive's aim to establish uniform minimum rates across the EU to ensure fair taxation and reduce the risk of a black market, while also emphasizing the need for public health improvement.
- —The committee amended Estonia's position to explicitly state that the setting of tax rates should remain a decision for individual Member States, and Estonia advocates for the principle of unanimity in taxation decisions.
- —Estonia's current excise duty rates largely align with the proposed EU minimums for 2028, with a need for a transition period until 2032 for smoking tobacco, and the proposal includes significant increases for cigarettes and smoking tobacco.
- —The committee decided to support the government's positions on the directive, incorporating amendments proposed by the Finance Committee.
Recap
Estonia's position on the EU tobacco directive is a calculated move to balance cooperation with sovereignty. By supporting harmonization while demanding control over final tax rates, Tallinn signals its commitment to EU public health goals but firmly rejects any erosion of its national fiscal autonomy. The debate over taxing new products like e-liquids is secondary to the core political issue: who holds the ultimate power to tax within the European Union.