The higher taxation is intended for e-cigarettes and HNB-products but also for conventional cigarettes, cigars and cigarillos. Nicotine-containing as well as nicotine-free substances for use in e-cigarettes, such as liquids, will in future be subject to tobacco tax – until now they have been subject to turnover tax. The basis of taxation will be changed from milligrams of nicotine to millilitres of the substance.
The reform introduces a new additional tax for heated tobacco and water pipe tobacco. According to the justification, these are to be treated like tobacco products and often appeal to young people as an entry-level product.
The tax on cigarettes will increase gradually over a period of five years to EUR 12.28 per stick. For fine-cut cigarettes it will gradually increase to EUR 61.58 per kilogramme. The existing minimum tax for cigars and cigarillos will increase in two steps by EUR 0.09 per piece.
According to the report, the aims of the law are not only to generate tax revenue but, also to reduce the smoking rate in Germany. In the long term, the Bundestag also wants the reform to support the European plans against cancer with an almost smoke-free EU in 2040.
The law will now be forwarded via the Federal Government to the Federal President for signature. It can then be promulgated in the Federal Law Gazette. It is expected to come into force mainly on 1 January 2022.