Estonia Joins EU States in Push for Tighter Cross-Border Tobacco and Alcohol Limits

EU States Seek Stricter Import Regulations

Several European Union member states, including Estonia, are actively supporting proposals to amend existing legislation, specifically Article 32 of the Excise Duty Directive and the Tobacco Taxation Directive (TED). The objective is to impose new, tighter limits on the quantities of tobacco and alcohol products individuals can import across internal EU borders for personal use. This move is primarily aimed at curbing illicit trade and addressing significant revenue losses experienced by higher-taxing nations.

The initiative was tabled by Denmark at an early-December meeting focused on the revision of the Tobacco Taxation Directive. Countries expressing support for a review of Article 32 include Austria, Finland, Estonia, Hungary, Ireland, Latvia, France, Slovenia, Bulgaria, Malta, and Germany. Notably, Estonia, Belgium, the Czech Republic, and Finland have voiced clear support for reducing import quantities, with Estonia, Finland, and Germany specifically advocating for these amendments to encompass alcoholic beverages as well.

Addressing Revenue Loss and Public Health Concerns

The push for stricter limits stems from concerns over substantial tax revenue losses and the undermining of national public health policies. Cross-border shopping, where consumers purchase goods in member states with lower excise duties, leads to a direct loss of VAT and excise duty revenues for their home countries. For instance, a study highlighted that inhabitants of Lithuania, Estonia, and Latvia collectively purchase approximately 255 million euros worth of beer outside national borders annually, resulting in significant tax losses for their respective governments.

Beyond financial implications, the current generous allowances for personal use are seen as detrimental to public health initiatives. High volumes of cross-border tobacco and alcohol purchases can counteract efforts to reduce consumption, particularly within the framework of Europe's Beating Cancer Plan. The European Anti-Fraud Office (OLAF) has emphasized that tobacco smuggling breaches EU rules and has harmful effects, including draining public budgets and undermining public health.

Current Allowances and the Path Forward

Under current EU guidelines, individuals are permitted to import considerable quantities of excise goods for personal use. These include up to 800 cigarettes, 400 cigarillos, 200 cigars, or 1 kilogram of smoking tobacco. For alcohol, the limits are 10 liters of spirits, 20 liters of fortified wine, 90 liters of wine (with a maximum of 60 liters of sparkling wine), and 110 liters of beer.

While the European Commission has previously launched public consultations on the taxation of cross-border alcohol and tobacco purchases to balance public revenues and health protection, it has shown some hesitancy regarding the immediate review of Article 32 within the ongoing TED discussions. However, member states like Estonia continue to press for a unified approach, recognizing that national-level actions are less effective when goods move freely within the EU. Estonia's Parliament, for example, has previously recommended significantly stricter regulations for new nicotine-containing products across the EU, emphasizing the need for a unified approach to improve health across the continent.