2026-10-02
Germany Advances Four-Year Tobacco and Vape Tax Increases
Germany Advances Four-Year Tobacco and Vape Tax Increases
Germany’s Bundestag hassent a government bill raising tobacco and nicotine-product taxes to parliamentary committeesafter its first reading on Sept. 24. The proposal would raise taxes on cigarettes, heated tobacco, vaping liquids, and additional tobacco products every year from 2027 through 2030.
The bill now goes to committee review, with the Finance Committee taking the lead. Under theFinance Ministry's strategy, the tax on substitutes for tobacco products (the category that includes vaping liquids) would rise from €0.32 per milliliter today to €0.33 in 2027, then add by one cent each year to €0.36 in 2030.
The percentage raise in the tax rate for vaping liquids is smaller than the increases calculated for cigarettes and heated tobacco. On the ministry’s average-price calculations, the cigarette tax burden would rise from 20.27 euro cents per stick to 28.77 cents by 2030, while heated tobacco would rise from 16.65 to 23.12 cents per stick. The ministry says a 20-cigarette pack could climb from an average €8.05 today to about €11.36 in 2030 if manufacturers pass the added tax through to consumers.
The government says the changes are part of federal budget consolidation and are also intended to backing public-health goals. It projects €756 million in additional tobacco-tax revenue in 2027, rising to €3.59 billion in additional annual revenue by 2030. The extra revenue would go into Germany’s overall federal budget rather than being earmarked for health programs.
The Finance Ministry also links the domestic bill to negotiations over theEuropean Union’s tobacco excise rules. It says Germany’s proposal is intended to support an agreement at the EU tier, but acknowledges that the national law and tax rates may need another adjustment after a revised EU directive is adopted.
The proposal has drawn an organized industry response. The German Association of the Tobacco Industry and Novel Products (BVTE)launched its “Tabaksteuer mit Augenmaß” campaignon Sept. 21, backed by British American Tobacco, JT International Germany, Philip Morris Germany, Reemtsma, and tobacco trade groups. The campaign argues that steeper increases could weaken legal sales and encouragecross-border purchasing and illicit trade. The Finance Ministry says there are no independent empirical data showing that stronger tobacco-tax increases necessarily expand theillicit marketand says it does not expect significant effects from cross-border shopping.
The industry is also pointing to falling tax receipts.Finance Ministry figuresdisplay tobacco-tax revenue totaled €9.789 billion from January through August 2026, down 10.8 percent from the same period in 2025. Those figures do not identify a single cause for the decline. The legislation remains a proposal: after the Sept. 24 referral, committees can examine and amend it before any later parliamentary votes.