Coalition Tightens Tobacco Tax: Cigarette Pack to Rise to Nearly €11.80 by 2030

As RND further reported, the planned changes to the tobacco tax are to bring around €800 million more annually into the federal coffers than previously envisaged. From coalition circles it was said regarding the cabinet's decision to raise the tobacco tax that this serves fiscal consolidation. The federal government must close billions in shortfalls.

Health Policy Justification and Youth Protection

The increase also serves to protect public health and is in line with the federal government's goal of reducing smoking rates among young people and adults. The background is also a new survey according to which 9.6 percent of 12- to 17-year-olds consume nicotine, with e-cigarettes being particularly popular.

Embedding in the Federal Government's Austerity Package

After the Bundestag, the Bundesrat on Friday also cleared the way for an austerity package from Health Minister Nina Warken (CDU) that is intended to keep health insurance contributions stable. It envisions billions in spending brakes for medical practices, hospitals, and the pharmaceutical industry. In connection with the package, the federal government had also made financial concessions to the states regarding hospitals.

Chancellery Minister Thorsten Frei (CDU) referred on the ARD-"Morgenmagazin" to changes in favor of hospitals and inpatient care regarding the tobacco tax. The Deutsche Presse-Agentur learned from coalition circles that the governing factions had decided to adjust the tax rates provided for in the government's draft upward once again.

Sources and Background of the Report

The black-red coalition wants to raise the tobacco tax more sharply than previously planned. The additional revenues are intended to contribute to consolidating the federal budget while at the same time co-financing the austerity package in the healthcare sector. The exact stages of the increase are set out in the formulation aid from the Finance Ministry.

The report comes directly from the dpa news channel and is based on information from coalition circles as well as on the formulation aid from the Federal Ministry of Finance.

The federal government justifies the step both fiscally and in health policy terms. A higher cigarette price is considered an effective means of keeping young people in particular from smoking. The exact effects on smoking rates and the black market will need to be assessed in upcoming reports.