The German government appears to have resolved its debate concerning the planned increase in tobacco taxes. According to “Bild”, CDU/CSU representatives on the Finance Committee in the Bundestag have decided to cease their opposition to the increase, allowing the revised version of the legislation to proceed to further parliamentary deliberation.
While figures from health policy and the party chairs of the Union and SPD have been pushing for higher levies, some Union politicians spent weeks warning against potential negative outcomes regarding projected revenue, citing the possibility of increased cigarette smuggling. A report indicates that Thorsten Frei (CDU), the Chairman of the Union faction in the Bundestag, received intense criticism during a meeting of his faction’s finance working group this Tuesday, but ultimately managed to push the issue through.
The government had previously approved a draft law in July outlining annual tax increases scheduled from 2027 to 2030. The amendment, which was brokered by the CDU/CSU and SPD and agreed upon by the governing coalition, stipulates even higher tax rates than the original government proposal. However, the prices for fine tobacco rolls will still need to be discussed before the law can formally pass during the second and third readings in the Bundestag.
Currently, a pack of 20 cigarettes costs approximately 8 Euros. Next year, the price is projected to rise to 9.10 Euros, which represents a 33-cent increase over previous expectations. By 2030, the average pack price is forecast to reach 11.78 Euros.
