Malta blocks EU tobacco tax deal backed by 26 countries

Irish Finance Minister Simon Harris said after the meeting: “We have an agreement of 26, which is a tremendous achievement.” Earlier, he had said most member states supported the deal and were “not worlds apart” and “inches away”. He paused the meeting for further bilateral talks after Finland, Estonia and Malta objected to the compromise.

Maltese Finance Minister Clyde Caruana said Malta supported the reform’s objectives, but its concerns “still persist”. He objected to raising minimum tax rates every three years in line with inflation and adjusting them for differences in price levels between member states, which would mean higher floor rates in countries with a higher cost of living. Caruana said the plans “do not provide genuine flexibility” for national conditions.

“The proposed minimum [excise tax] rates remain well above current national levels, notwithstanding the latest changes related to nicotine pouches,” Caruana said. “Such increases risk having disproportionate effects in Malta.”

Estonia also opposed indexation but accepted an Irish compromise to freeze EU minimum rates until the law’s next revision, which has not been scheduled. Finland, which had sought higher taxes, also accepted the compromise. Malta’s refusal left the member states without a deal.