German coalition plans sharper tobacco tax hike, pushing cigarette packs toward €12 by 2030

What the coalition is planning

Germany's governing coalition intends to raise tobacco duty more aggressively than the draft law the cabinet approved only last week. A "Formulierungshilfe" (drafting guide) from the Federal Ministry of Finance, seen by several newsrooms including the ARD-Hauptstadtstudio and the Frankfurter Allgemeine Zeitung, maps out a steeper trajectory. The average price of a pack of 20 cigarettes would climb from roughly €8 today to €9.10 in 2027, then step up each year to reach €11.78 by 2030. That is about 42 cents more than the ministry's original bill assumed. Brand-name cigarettes such as Marlboro or Lucky Strike could hit €11 as early as next year and €13 by 2030, industry representatives estimate.

The revision targets two goals: closing a gap in the federal budget and shoring up the statutory health insurance system, which faces a €750 million deficit. Kanzleramtsminister Thorsten Frei (CDU) told ARD's "Morgenmagazin" that the extra revenue could flow to hospitals and inpatient care. "We have to see how we can keep the system as a whole so that the €19 billion next year is saved without an increase in contribution rates," Frei said.

How the tax mechanics work

The tax per cigarette is set to rise from the current level to 14.34 cents in 2027 and then gradually to 18.57 cents in 2030. At the same time the ad-valorem component, levied as a percentage of the retail price, would increase from 20% to 21.05%. Together these changes push the tax share of a pack from about €4 today to €6.19 by 2030. The government's original bill projected additional annual revenue of roughly €0.8 billion in 2027; the sharper plan doubles that to about €1.6 billion in the first year. By 2030 the annual top-up is expected to reach €4.4 billion, bringing total tobacco-tax receipts to around €21 billion that year.

Fine-cut tobacco for hand-rolled cigarettes was initially slated for a heavier increase, but the latest draft pulls back somewhat on that front. Cigar smokers, however, face a tenfold rise in the ad-valorem tax on the retail price.

Public opinion and political backing

A Forsa survey commissioned by Stern and RTL, published on 14 July, found that 70% of Germans support higher cigarette prices, while 27% oppose them. Majorities among voters of the CDU/CSU, SPD, Greens and Die Linke back the increase. Opposition comes chiefly from regular smokers and supporters of the AfD.

Hendrik Streeck (CDU), the federal government's commissioner for addiction and drug issues, endorsed the move. "The clear increase in tobacco tax is a right decision," Streeck told the Frankfurter Rundschau. "Price is one of the most effective levers to deter young people from starting and to support smokers in quitting."

The clear increase in tobacco tax is a right decision. Price is one of the most effective levers to deter young people from starting and to support smokers in quitting.

Industry pushback and health voices

The tobacco industry reacted with disbelief. Jan Mücke, chief executive of the industry association BVTE, called the revenue projections "pure fantasy" and warned that higher prices would push consumers toward the black market. "The tax increase would be an economic stimulus programme for organised crime," Mücke said. He noted that after a 15-cent tax rise at the start of 2026, federal tobacco-tax receipts reached only €5.2 billion in the first half of the year, compared with €17.6 billion for all of 2025. "Last year's figure will not be reached this year, and if the tax burden becomes significantly heavier in the coming years, this decline in tax revenue will continue."

The federal government is planning with additional revenues that are pure fantasy; none of it will become reality.

Christian Cordes of Reemtsma echoed the concern, pointing to France and the Netherlands where, he said, the legal market has effectively collapsed and cross-border and illicit trade are booming. Cancer researchers, by contrast, welcomed the plan. Katrin Schaller of the German Cancer Research Center stressed that higher prices are a proven tool to reduce consumption, especially among price-sensitive young people.

What happens next

The drafting guide now moves to the Bundestag factions for deliberation. If adopted, the first stepped increase would take effect on 1 January 2027. The government frames the measure as both a fiscal consolidation tool and a public-health intervention aligned with its target of lowering smoking rates among adolescents and adults. Eurostat figures cited by Deutsche Welle show that roughly a quarter of Germans aged 15 and older smoke regularly.