Date: 02/09/2021
Author: Inspector Z

According to the German newspaper Spiegel, the German Federal Finance Minister is planning a noticeable increase in tobacco taxes. Olaf Scholz wants the new tax per January 1st, 2022, and to increase the price in 5 annual steps. The tax is focussing on cigarettes and roll your own tobacco. But the tax on cigars and cigarillos are rising accordingly. And for the first time, e-cigarettes will be taxed as tobacco products in the new plans.

Tax hike

The plan is to raise the tax on packs of cigarettes by 5 cents a year. The price of rolling tobacco is receiving a 15 cent tax hike. The exact percentages for cigars and cigarillos are not known yet. These plans should increase the tobacco tax income for the federal treasury by 2 billion euros per step. It is expected that the bill is entered in the ministerial vote in the next few days.

The increase in tobacco tax played a role at the recent coalition summit on Wednesday. The coalition partners agreed to finally get the project off the ground. The preliminary considerations for this are already two years old. Finance Minister Scholz has already included the additional income in his financial planning.

Cigarette companies agree

The tobacco industry is also on board with the increase. She hopes that the step-by-step solution will help her customers get used to the moderately rising prices and not stop smoking immediately. Experience also shows that tobacco companies, in the wake of a tax hike, tend to raise their prices to improve their operating results. Now, this is true for mass-market products such as cigarettes but not the case for cigar producers and distributors. Again cigar smokers are the victim of the federal war against cigarettes.

 

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