(de-news.net) – Germany’s Bundestag is expected to approve a gradual increase in tobacco taxes from 2027 through 2030 on Thursday evening, with the Government seeking additional revenue and stronger public health protections. The average price of a pack is projected to rise in stages, while annual additional tax revenue is expected to increase accordingly. The measure has drawn criticism from tobacco industry representatives, who warn of increased illicit-market activity, while medical organizations argue that higher prices could discourage smoking and prevent disease. The Greens have called for further measures, including tighter advertising restrictions. The debate comes as tobacco-related illnesses continue to impose a substantial health burden in Germany.

The German parliament is set to vote legislation to gradually increase tobacco taxes from 2027 to 2030 this evening, under a proposal making an effort to improve public finances and deter smoking. Under the plan, the average price of a pack of 20 cigarettes is projected to rise from 8.05 euros last summer to 11.78 euros in 2030, an increase of 3.73 euros. Premium brands could cost as much as 14 euros per pack.

The tax increases will extend beyond manufactured cigarettes to include roll-your-own tobacco, cigars, cigarillos, waterpipe tobacco and liquids used in electronic cigarettes. The size of the adjustments will vary by product, but the broader policy is intended to combine additional government revenue with measures to protect public health. The Federal Government expects the first year of implementation to generate an additional 1.5 billion euros in tax revenue. By 2030, annual additional receipts are projected to reach 4.5 billion euros. Tobacco taxes generated 17.6 billion euros in the preceding year, providing a substantial existing source of federal income.

Government officials have presented the increases as necessary for budget consolidation and public health protection. Supporters argue that higher prices could discourage tobacco consumption and, over time, reduce smoking-related illnesses and the associated costs to the health care system. The policy’s fiscal and health objectives, however, have prompted differing assessments of how consumers might respond to the higher prices.

Tobacco industry warns of illicit-market growth

Representatives of the tobacco industry have criticized the proposal, warning that higher legal prices could encourage consumers to purchase illicit products or buy tobacco abroad. Jan Mücke, chief executive of the German Federal Association of the Tobacco Industry and Novel Products (BVTE), has argued that previous tax increases have not demonstrated that higher prices alone can substantially reduce smoking. Mücke has also questioned the government’s revenue projections, contending that an expansion of the illicit market could undermine the anticipated financial gains. He has further criticized additional increases in everyday living costs, describing them as particularly ill-advised. In addition, some consumers are expected to shifted from manufactured cigarettes to loose tobacco when the price of conventional cigarette packs increased.

The German Association of Smoking Tobacco Manufacturers has raised similar concerns, particularly regarding the tax treatment of roll-your-own tobacco. Under the new legislation, however, loose tobacco will also become more expensive, potentially narrowing the price difference between the two products. The association warns that this could reduce the incentive for smokers to switch from manufactured cigarettes to legally sold loose tobacco. Instead, some consumers could turn to illicit cigarettes, leaving legitimate businesses with fewer customers and the government with less tax revenue than anticipated. Industry representatives therefore dispute the assumption that higher statutory tax rates will necessarily translate into higher government receipts. Their concerns center on whether consumers will continue purchasing taxed products through legal channels as the price gap between legal and illegal alternatives becomes more consequential.

Medical groups emphasize public health benefits

Public health organizations have offered a contrasting assessment, emphasizing the potential for higher tobacco prices to discourage consumption and prevent disease. The German Medical Association considers taxation one of the most effective measures for curbing excessive smoking. Its president, Klaus Reinhardt, has described higher tobacco taxes as an important component of public health protection. Smoking remains a major preventable cause of illness and premature death, while smoking-related conditions impose substantial recurring costs on the health care system.

The Federal Association of Pneumologists has likewise argued that the proposed increases could contribute to cancer prevention over the longer term. From this perspective, the policy’s effects should be assessed not only through immediate tax receipts but also through its potential contribution to reducing tobacco use and its associated health consequences. The competing assessments reflect different expectations about the consequences of higher prices. Industry representatives emphasize the possibility of substitution toward illicit products, while medical organizations focus on the potential for increased costs to discourage smoking and reduce preventable disease.

Governing coalition backs the tax increases

The Federal Government backed by a coalition comprising the CDU, its Bavarian sister party, the CSU, and the SPD, has supported the increases as a means of generating additional federal revenue. SPD lawmaker Frauke Heiligenstadt has emphasized the role of price in discouraging tobacco consumption, particularly among children and adolescents, who may be especially responsive to increases in the cost of cigarettes. Protecting younger people from smoking is a central argument advanced by supporters of the measure. Heiligenstadt has also highlighted the financial burden that smoking-related illnesses place on health insurers. Those costs extend beyond individual smokers, affecting the wider system of policyholders and people who contribute to health insurance funding.

Not all lawmakers within the governing parties have supported the scale of the proposed increases. CDU lawmaker Carsten Brodesser, who serves on the Bundestag’s Finance Committee, had argued for more moderate tax adjustments. The debate has therefore involved not only the broader question of whether tobacco should be taxed more heavily, but also the appropriate pace and scale of increases. Supporters favor a stronger price signal and additional revenue, while critics have raised concerns about the economic effects on consumers and the potential consequences for legal tobacco sales.

Greens call for stronger tobacco-control measures

The Green Party has argued that the proposed increases do not go far enough to reduce smoking rates and has called for a more comprehensive approach to tobacco control. Johannes Wagner, a Green Party lawmaker, has advocated banning tobacco advertising at points of sale, including promotional displays commonly found at gas stations and kiosks. Such restrictions would extend tobacco-control measures beyond taxation to the retail environments in which consumers encounter tobacco products. Wagner has also supported standardized cigarette packaging. Under this approach, manufacturers would no longer be permitted to use prominent corporate logos and colorful branding, with packaging instead featuring uniform typography and graphic health warnings. France is among the countries that have already implemented such requirements.

Although Wagner supports higher tobacco taxes, he considers the government’s proposal insufficiently ambitious compared with approaches adopted elsewhere in Europe. He has argued that the projected additional revenue should be weighed against the more than 100 billion euros in annual costs associated with tobacco use, particularly the burden on the health care system. The Greens’ position reflects a broader policy approach that combines taxation with restrictions on advertising and product presentation. Rather than relying on price increases alone, the party favors additional measures intended to reduce tobacco’s visibility and appeal.

Committee approval clears a key legislative hurdle

The Bundestag’s Finance Committee approved the legislation before the measure received the backing of the full parliamentary chamber. The Bundesrat, Germany’s Federal Council representing the states, retains the possibility of lodging an objection, although such a move is considered unlikely. With parliamentary approval secured, the proposal establishes a timetable for progressively higher tobacco taxes through 2030. Its eventual effects will depend in part on how consumers respond to the price increases and whether the government achieves its projected revenue gains.

The policy also leaves unresolved the competing claims surrounding its public health impact. Supporters anticipate that higher prices will discourage smoking, while industry representatives warn that illicit-market activity could weaken both the fiscal benefits and the position of legitimate businesses.

Smoking remains a significant public health burden

Smoking continues to affect a substantial share of Germany’s population. According to the 2025 microcensus, 19 percent of residents aged 15 and older reported smoking. Of the population covered by the survey, 14 percent said they smoked regularly, while 5 percent reported occasional use. The health consequences remain considerable. The German Cancer Research Center estimated that approximately 131,000 people died from tobacco-related diseases in 2023, underscoring the scale of the preventable mortality associated with smoking.

Against this backdrop, the planned tax increases form part of a continuing debate over how best to reduce tobacco consumption while maintaining reliable public revenue. The legislation’s long-term significance will depend on whether higher prices change smoking behavior, limit tobacco-related harm and deliver the additional tax income projected by the Federal Government.