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GERMANY

Tobacco tax will be raised

10 Jun 2021. The financial committee of the German Parliament has officially voted to raise tobacco taxes which will largely affect e-cigarettes and heat-not-burn products, reports the German Bundestag.

After many weeks of speculation, the Bundestag’s financial committee has given the green light for the modernisation of the tobacco tax law. This means that taxes on traditional cigarettes, cigars and cigarillos will be raised but the biggest change will happen in regard to e-cigarettes and heat-not-burn products. Up until now, e-cigarettes had only been subject to value added tax but in future will also be liable to tobacco tax. There will be an additional tax introduced for heat-not-burn products meaning they will be taxed the same as conventional cigarettes, according to the German Bundestag.

The CDU/CSU fraction said that the raise in taxes was necessary from a preventative point of view. The long-term goal is to encourage cigarette smokers to switch to less harmful alternatives and then to quit altogether. According to the SPD fraction, e-liquids and heat-not-burn products had been low-taxed up until now which needed to be rectified.

The opposition criticised the move, saying there needed to be more discussion around the topic.