Inflation Adjustment Provision Nixed From EU Tobacco Tax Bill

EU negotiators discussing a bill that would raise minimum taxes on tobacco across the bloc removed a mechanism to ensure that rates rise in tandem with prices.

Cyprus, which holds the EU’s rotating presidency and responsible for shepherding bills through the EU’s legislative process, instead replaced it with a formula meant to assist countries in determining how much they should adjust their rates every three years starting in 2035, according to the draft of the bill dated Feb. 18 and seen by Bloomberg.

The bill, known as the Tobacco Taxation Directive, would more than double the minimum ...