Abstract
Policy Brief - Ukraine’s experience reveals how tobacco companies are adapting to tax reforms by manipulating pricing strategies, particularly concerning heated tobacco products (HTPs) and electronic cigarettes (e-cigarettes). Findings of this new research provide critical insights for EU policymakers by highlighting the benefit of consistent excise policies across tobacco products and Member States.
As the European Union advances its vision for a Tobacco-Free Generation under Europe’s Beating Cancer Plan, aligning fiscal policy with public health goals has become increasingly urgent. Tobacco taxation reform is a critical lever, not only to deter harmful consumption and reduce health inequalities, but also as part of the EU’s broader strategy for non-communicable disease (NCD) prevention and long-term fiscal sustainability.
Recent research highlights Ukraine’s experience as a timely and instructive case study. It provides critical insights into how tobacco companies are adapting to tax reforms by manipulating pricing strategies, particularly concerning heated tobacco products (HTPs) and electronic cigarettes (e-cigarettes). The study reveals that while taxation on these products has increased, the historically lower tax rates on HTPs have effectively acted as an indirect subsidy, benefiting the tobacco industry while undermining public health efforts.
The research highlights how tobacco companies leverage discrepancies in tax rates between combustible cigarettes and HTPs, to boost profits, at the expense of government revenues. The findings provide critical insights for EU policymakers by highlighting the benefit of consistent excise policies across tobacco products and Member States. Unequal tax rates across States risk undermining tobacco control through cross-border shopping and enforcement gaps. As the European Commission prepares to revise the Tobacco Tax Directive (TTD), Ukraine’s case study offers valuable insights. With growing political momentum and public health imperatives aligned under initiatives such as the EU Health Union and the Beating Cancer Plan, now is a critical moment for decisive action on tobacco taxation, both across Member States and tobacco product categories.
As the European Union advances its vision for a Tobacco-Free Generation under Europe’s Beating Cancer Plan, aligning fiscal policy with public health goals has become increasingly urgent. Tobacco taxation reform is a critical lever, not only to deter harmful consumption and reduce health inequalities, but also as part of the EU’s broader strategy for non-communicable disease (NCD) prevention and long-term fiscal sustainability.
Recent research highlights Ukraine’s experience as a timely and instructive case study. It provides critical insights into how tobacco companies are adapting to tax reforms by manipulating pricing strategies, particularly concerning heated tobacco products (HTPs) and electronic cigarettes (e-cigarettes). The study reveals that while taxation on these products has increased, the historically lower tax rates on HTPs have effectively acted as an indirect subsidy, benefiting the tobacco industry while undermining public health efforts.
The research highlights how tobacco companies leverage discrepancies in tax rates between combustible cigarettes and HTPs, to boost profits, at the expense of government revenues. The findings provide critical insights for EU policymakers by highlighting the benefit of consistent excise policies across tobacco products and Member States. Unequal tax rates across States risk undermining tobacco control through cross-border shopping and enforcement gaps. As the European Commission prepares to revise the Tobacco Tax Directive (TTD), Ukraine’s case study offers valuable insights. With growing political momentum and public health imperatives aligned under initiatives such as the EU Health Union and the Beating Cancer Plan, now is a critical moment for decisive action on tobacco taxation, both across Member States and tobacco product categories.
| Original language | English |
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| Publisher | Smoke Free Partnership |
| Publication status | Published - 8 Jul 2025 |
Publication series
| Name | Smoke Free Partnership |
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