Tobacco tax – what is it and how does it work?

Tobacco tax is a special tax levied on tobacco products, affecting the price of snus, cigarettes and other tobacco items. But how does the tobacco tax law actually work? Why does it exist, and how much money does the government really make from it? In this article, we’ll break down everything you're curious about!

What is tobacco tax?

Tobacco tax is an excise duty levied on all tobacco products sold in Sweden. The tax varies depending on the product, with, for example, cigarettes, snus and smoking tobacco being taxed differently. The purpose of the tax is both to generate revenue for the government and to reduce tobacco consumption through higher prices.

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Try IQOS ILUMA i for 60 days

Discover a better alternative by heating tobacco instead of burning it.

No smell of smoke

Heats tobacco & nicotine without burning it

No second-hand smoke and no ash

With IQOS there is no fire and therefore no smoke or ash follows - and no cleaning required, ever, with our latest ILUMA series!

Try IQOS ILUMA i

How much does the state earn from tobacco tax?

Tobacco tax is a significant source of government revenue. Every year, Sweden collects several billion kronor from the tax on cigarettes and snus. In recent years, revenue from tobacco tax has totalled over SEK 11 billion per year, with the majority coming from cigarettes.

How is snus taxed compared to cigarettes?

Tobacco tax on snus differs from that on cigarettes. Cigarettes are taxed per unit, while snus is taxed per kilo of tobacco. This means that an increase in tobacco tax on snus can make a packet more expensive, but often at a different rate than for cigarettes.

Tobacco tax increase and decrease – what happened?

Over the last few years, there have been several discussions about increasing tobacco taxes. The tax has been increased in stages, particularly on cigarettes, with the aim of reducing smoking and increasing government revenue. On the other hand, there has also been a debate on reducing tobacco tax on snus, as snus is considered less harmful than cigarettes. Some argue that a lower tax on snus could encourage more people to choose snus over smoking, while others believe that all tobacco products should be heavily taxed to reduce consumption.

In November 2024, new rules were introduced which increased taxes on cigarettes, cigarillos, smoking tobacco and other tobacco by 9% while reducing taxes on snus by 20%.

What could influence future tobacco tax changes?

There are several factors that can influence whether tobacco taxes are raised or lowered in the future:

• Public health policy decisions - The government may choose to raise taxes to reduce tobacco use.
• Economic factors - Increases can be implemented to increase tax revenues.
• EU guidelines - Sweden must comply with certain minimum tax levels under EU law.