European court: Hungary failing to comply with tobacco excise tax hike

Hungary has failed to comply with European Union regulations by keeping the excise tax on tobacco products below the required threshold, the Court of Justice of the European Union (CJEU) said on Thursday.

The European Commission turned to the CJEU in October 2019 with the complaint that Hungary had failed to gradually raise the excise tax on tobacco products to the required threshold by the deadline of December 31, 2017.

Under EU guidelines, the excise tax on tobacco products must reach 60 percent of the average retail price but at least 90 euros per 1,000 cigarettes. The 60 percent ratio does not apply to prices above 115 euros per 1,000 cigarettes.

The EC said Hungary had failed to reach that threshold in 2017 or in subsequent years until the suit was brought, distorting competition within the bloc and violating EU health protection regulations.

The CJEU on Thursday upheld the EC’s claim that Hungary failed to comply with EU regulations.

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