Key Points
- Germany's parliament is scheduled to hold a first reading on September 24 of proposed amendments to the Tobacco Tax Act.
- The government plans annual increases from 2027 through 2030, with cigarette tax rising to 28.77 euro cents per stick, heated tobacco to 23.12 cents and vaping-liquid duty to €0.36 per ml by 2030.
- The government forecasts €756 million in additional tobacco-tax revenue in 2027, rising to €3.589 billion in additional annual revenue by 2030.
- BVTE's campaign is backed by BAT, JTI Germany, Philip Morris Germany and Reemtsma, as January-August tobacco-tax receipts fell 10.8% year over year.
2Firsts
September 23, 2026
Germany's Bundestag is scheduled to hold a first reading on September 24 of proposed amendments to the Tobacco Tax Act that would raise taxes on cigarettes, heated tobacco, vaping liquids and other tobacco products annually from 2027 through 2030.
Ahead of the parliamentary debate, the German Association of the Tobacco Industry and Novel Products, or BVTE, launched its "Tabaksteuer mit Augenmaß" initiative on September 21, calling for changes to the government's proposed tax trajectory.
The campaign is backed by British American Tobacco's German business, JT International Germany, Philip Morris Germany, Imperial Brands-owned Reemtsma and German tobacco wholesale, vending and retail associations.
Germany Plans Four Annual Tax Increases
Germany's federal cabinet approved the draft amendments on July 6.
Under the Finance Ministry proposal, major tobacco and nicotine-product tax rates would rise on January 1 of each year from 2027 through 2030.
| Product | Current | 2027 | 2028 | 2029 | 2030 |
|---|---|---|---|---|---|
| Cigarettes | 20.27 euro cents/stick | 22.21 | 24.21 | 26.39 | 28.77 |
| Heated tobacco | 16.65 euro cents/stick | 18.15 | 19.67 | 21.32 | 23.12 |
| Vaping liquids and other tobacco substitutes | €0.32/ml | €0.33 | €0.34 | €0.35 | €0.36/ml |
| Fine-cut tobacco | €100.76/kg | €118.90 | €140.99 | €172.40 | €210.51/kg |
The nominal increases vary substantially by category.
Vaping-liquid duty would rise about 12.5% from its current level through 2030, compared with roughly 42% for the average cigarette tax burden and about 39% for heated tobacco. Fine-cut tobacco duty would more than double.
Government Forecasts €3.589 Billion in Additional Annual Revenue by 2030
The government bill submitted to the Bundestag estimates that the reform would generate €756 million in additional tobacco-tax revenue in 2027.
By 2030, the additional annual revenue is projected to reach €3.589 billion.
The government says the changes are intended to support federal budget consolidation while also contributing to public-health goals, including lower smoking rates among adults and young people.
The Finance Ministry estimates that if manufacturers and importers pass the higher tax burden through to consumers, the average price of a 20-cigarette pack could rise from about €8.05 currently to:
- about €8.77 in 2027;
- €9.56 in 2028;
- €10.42 in 2029;
- and about €11.36 in 2030.
Actual retail prices remain set by manufacturers and importers.
BAT, JTI, PMI and Reemtsma Back Industry Campaign
BVTE launched "Tabaksteuer mit Augenmaß" on September 21, calling for smaller and more predictable tax increases.
The campaign focuses on government revenue, illicit trade, consumer costs, legal retail and tax differentiation across product categories.
JTI Germany separately backed the initiative through its official LinkedIn account, saying it addresses the potential effects of the proposed increases on legal trade, cross-border purchasing and illicit markets.
BVTE argues that larger increases could shift more consumers toward cross-border or illegal supply and reduce sales through Germany's legal wholesale and retail channels.
Germany's federal lobbying register also shows BAT, JTI Germany, Philip Morris, Reemtsma and BVTE engaging on the Tobacco Tax Act amendments, with positions including limits on the proposed 2027-2030 increases, adjustments to tax treatment across categories and formal taxation of tobacco-free nicotine pouches.
Industry Pushes for Wider Tax Differentiation
The government proposal already applies different tax rates and trajectories across categories.
Vaping-liquid duty, for example, would rise from €0.32 per ml to €0.36 by 2030, a smaller percentage increase than those proposed for cigarettes and heated tobacco.
BVTE is seeking wider differentiation and says taxation should more strongly reflect differences in product characteristics and risk profiles.
The campaign is also calling for tobacco-free nicotine pouches to be brought into Germany's formal regulatory and tax framework.
BVTE says around 1.5 million people in Germany use nicotine pouches and that 20 of the EU's 27 member states have established regulatory frameworks for the category.
It estimates that a legal and taxed nicotine-pouch market in Germany could generate around €400 million to €500 million in annual tax revenue.
Those figures are BVTE estimates rather than German government forecasts.
Tobacco-Tax Revenue Down 10.8% Through August
German Finance Ministry data show cash tobacco-tax revenue totaled €9.789 billion from January through August 2026, down from €10.975 billion a year earlier, a 10.8% year-over-year decline.
August revenue alone was €1.247 billion, down 5.4%.
Germany's full-year 2026 tobacco-tax budget target is €16.890 billion.
BVTE also says tax-paid cigarette volume fell to about 40.6 billion sticks in the first eight months of 2026 from 46.5 billion a year earlier, a decline of 12.6%.
The industry is citing lower legal-market volume and tax receipts in arguing against steeper increases. The Finance Ministry's published revenue figures do not assign a single cause to the decline.
Bundestag First Reading Scheduled for September 24
The Bundestag has placed the Tobacco Tax Act amendment on its September 24 agenda.
Following the first reading, the bill is expected to be referred to parliamentary committees, with the Finance Committee serving as the lead committee.
If approved, the first round of new rates is scheduled to take effect on January 1, 2027.
Germany's domestic reform is moving in parallel with a broader European Union tobacco-tax overhaul.
The European Commission proposed changes to the Tobacco Excise Directive in July 2025 that would more systematically bring vaping liquids, heated tobacco and nicotine pouches into the EU minimum excise framework.
Germany's Finance Ministry says the domestic proposal is also intended to support negotiations at EU level. National tax rates and legislation could be adjusted again if the revised EU directive is ultimately adopted.
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Cover Image: BVTE / Tabaksteuer mit Augenmaß
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