The sharp increase in the price of cigarettes is leading to a drop in tax income for the treasury, as more people stop smoking or buy their tobacco products over the border, RTL reported on Tuesday.

Since April, a packet of 20 cigarettes has cost over €11, of which €7.80 is down to taxes.

According to finance ministry figures, tobacco sales fell 40% in June and were 30% down in July and August. That is so high that the total amount raised in taxes is below government forecasts, RTL said.

“If you look at the figures… you can see the government’s forecast of a €400 million increase in taxes threatens to become a loss of €100 million,” tobacco retail group NSO said. In total, this could hit the new government’s spending plans by almost €500 million.

The cabinet will say more about the impact next week, when the 2025 spending plans are published.

Bought abroad

RSO figures suggest some 35% of tobacco products used in the Netherlands were not bought here. And government research last year showed to 25% of empty cigarettes packets thrown away as litter originated abroad.

Research by the public health institute RIVM also indicates that smokers buy around 10% of their tobacco abroad, by either importing it themselves or asking others to do so.

Pro-countryside party BBB has sounded the alarm and called on the finance minister to state if the tax figures are accurate. “If that is the case, we have to reverse the tax increase,” said BBB parliamentarian Henk Vermeer. “The finance ministry cannot have any objections to this as a tax cut.”

In July customs officials seized six million cigarettes and 4.5 tonnes of rolling tobacco during checks at Rotterdam port. The cigarettes, known as “illicit whites” in official jargon, are considered illegal in the Netherlands because the brand is not officially recognised within the EU.

If they and the rolling tobacco had been sold officially, they would have generated €3.9 million in tax income, officials said.