Brussels, March 15 (Bloomberg) -- Italy, Spain, Greece, Portugal and Luxembourg will have to increase taxes on cigarettes under European Commission plans to cut down on fraud by reducing differences in tobacco taxes in the 15-nation European Union.

Current rules set excise duty at a minimum of 57 percent of the retail price in the most popular price category in each country and allow wide variation in price -- taxes on the most popular cigarettes in the U.K. are nearly four times as high as in Spain. The proposal would set an additional minimum tax of 70 euros ($63.32) for every 1,000 cigarettes, whichever is greater.

``The proposal is necessary to narrow differences between member states' taxation levels and so help to tackle fraud and smuggling,'' said EU Single Market Commissioner Frits Bolkestein. Tobacco companies said the measures would fail to address true smuggling from outside the EU.

In January, Italy joined the commission in a U.S. lawsuit that accuses Philip Morris Cos. and R.J. Reynolds Tobacco Holdings Inc., the two largest U.S. tobacco companies, of smuggling cigarettes into the EU since the late 1970s.

Tobacco industry representatives said the measures ignored differences in purchasing power between EU countries and would hit international travelers buying cigarettes for their own use, rather than addressing illegal smuggling from countries such as the U.S. and Brazil.

``It's completely stupid to think if you increase the price of cigarettes in Spain that you will decrease the amount of duty unpaid in the U.K.,'' said Guy Dutreix, advisor to the chairman of Altadis SA, Europe's third-largest tobacco company, in an interview. ``In fact, it will be a push for an increase in duty- not-paid cigarettes'' across the EU.

The tobacco industry already faces tougher EU laws on tar and nicotine ceilings for cigarettes from October next year, as well as larger health warnings on packs and bans on terms such as ``mild'' and ``light.'' The commission is also examining how to restrict tobacco advertising after a law providing for a total ban was struck down by the European Court of Justice last year.

Half a million EU citizens die each year from smoking related diseases, making smoking the single biggest preventable health threat to Europeans, according to the commission, the EU's executive arm. Almost 30 percent of Europeans are regular smokers.