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GERMANY

Tobacco tax to rise after all

16 Feb 2021. Despite having said that there would be no tobacco tax increase for the time being only a few weeks ago, the Federal Ministry of Finance is now planning an increase, reports Frankfurter Allgemeine Zeitung (FAZ).

For the first time, the tax hike will also apply to e-cigarettes containing nicotine which were previously exempt from tobacco tax. The ministry did not want to comment on details.

As a result, the state expects additional revenue of more than EUR 12 billion between 2022 and 2026. The new rates mean that the tax on cigarettes will increase by around EUR 0.08 per pack every year from 2022. For a 40-gramme pack of fine cut tobacco, the tax to the treasury will rise by up to EUR 0.15. It is generally expected that manufacturers will pass the increase on to consumers, the report said. The last tax increase on tobacco happened six years ago.