You can't smoke. however the spy has a cigarette in his mouth. There are also multiple cosmetics that include tobacco related items.

You can "smoke" cigarettes in a creative and useful way. You hold the cigarette up to your mouth and it tells you the number of remaining people to serve. However afterwards you don't exhale smoke.

The player character permanently smokes a cigarette. If you buy one of the DLCs, you get access to a cigar, and a pipe. Unfortunately there's no interactivity with them, they are cosmetic.