Germany’s Bundestag moves ahead with plans for annual tobacco tax increases from 2027 through 2030. Photo credit: Gzen92, CC4.0.
Germany's Bundestag is moving forward with a government proposal to raise tobacco taxes annually from 2027 through 2030, with the government expecting the measures to generate €756 million (US$888 million) in additional revenue in 2027 and €3.59 billion (US$4.22 billion) annually by 2030.
The Bundestag held the bill's first reading on September 24 and referred it to parliamentary committees for further consideration, with the Finance Committee taking the lead. The proposed increases would take effect on January 1 of each year from 2027 through 2030.
The plan covers cigarettes, fine-cut tobacco, cigars and cigarillos, pipe tobacco, waterpipe tobacco, heated tobacco, and tobacco substitutes. For cigarettes, the tax rate would rise from 20.27 euro cents per stick currently to 22.21 cents in 2027, 24.21 cents in 2028, 26.39 cents in 2029 and 28.77 cents in 2030.
Fine-cut tobacco would see its tax rate increase from €100.76 (US$118.40) per kilogram currently to €118.90 (US$139.70) in 2027 and €210.51 (US$247.30) in 2030. Pipe tobacco would rise from €39.76 (US$46.70) to €165.46 (US$194.40) per kilogram over the same period.
The Finance Ministry estimates that the higher taxes could lift the weighted average retail price of a 20-cigarette pack from about €8.05 (US$9.45) currently to €8.77 (US$10.30) in 2027, €9.56 (US$11.23) in 2028, €10.42 (US$12.24) in 2029 and €11.36 (US$13.34) in 2030. Manufacturers and importers set retail prices, however, so the figures represent estimates rather than mandated prices.
The government says the tax increases form part of measures agreed to address pressure on the federal budget. It also says the changes support public-health objectives, including reducing smoking rates among young people and adults.
The proposed increases have drawn opposition from the tobacco industry. The German Association of the Tobacco Industry and Novel Products (BVTE) launched its “Tabaksteuer mit Augenmaß” campaign on September 21, backed by BAT Germany, JTI Germany, Philip Morris Germany, Reemtsma, and tobacco wholesale, vending, and retail associations. The campaign calls for changes to the proposed tax trajectory.
The industry's position comes as Germany's tobacco-tax receipts have declined. Finance Ministry figures show total tobacco-tax revenue reached €9.789 billion (US$11.50 billion) from January through August 2026, down 10.8% from the same period last year. BVTE, citing federal statistics, also reported that tax-paid cigarette volume fell 12.6% to 40.6 billion sticks, while cigarette-tax revenue declined 11.3% to about €7.42 billion (US$8.72 billion).
BVTE has cited the lower legal-market volumes and tax receipts in arguing against further increases, while warning that higher taxes could encourage cross-border purchasing and illicit supply. The Finance Ministry has said its published revenue figures do not establish a single cause for the decline.
Hesse has also announced that it will oppose the proposed tobacco tax increases, along with planned tax changes affecting sparkling wine and sugar. The state government has described the measures as problematic for consumers and businesses.