June 16, 2021

Smoking: increase in tobacco tax – e-cigarettes will soon be affected too

economy E-cigarettes too

Bundestag increases tobacco tax – children’s leisure bonus of 100 euros


The reform of the tobacco tax has made significant progress

Source: dpa / Armin Weigel

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Starting next year, smokers will have to pay more for cigarettes. The Bundestag decided on Friday to increase the tobacco tax. E-cigarettes will soon also be taxed significantly higher.

DGermany’s smokers are being asked to pay more. The Bundestag decided on Friday morning that the tobacco tax for a pack of 20 cigarettes would rise by an average of ten cents in the coming year.

A year later, another ten cents will be added, in 2025 and 2026 another 15 cents per pack will be added. The tax on classic cigarettes is increasing more than originally planned by the federal government. On June 25, it is still the Federal Council’s turn, whose green light is almost certain. Cigars and cigarillos are also affected by the higher tax.

The legislature is turning the tax screw particularly hard on e-cigarettes and tobacco heaters – these products were previously only lightly taxed, but that will change in future. For a ten-milliliter liquid, which currently costs around five euros, tax should be 1.60 euros more in 2022, and this value should rise to 3.20 euros by 2026. Nicotine-free liquids are also taxed. In addition, an additional tax on water pipe tobacco is to be introduced.

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There was criticism from the manufacturers – they pointed out that e-cigarettes and tobacco heaters contain significantly fewer pollutants than tobacco cigarettes. This difference is not taken into account for fiscal purposes, they argue. The Association of the E-Cigarette Trade (VdeH) warned against a return of consumers to tobacco cigarettes.

Lawsuit before the Federal Constitutional Court?

The alliance for tobacco-free enjoyment – the industry representative for e-cigarettes – wants to go to the Federal Constitutional Court and file a constitutional complaint because of what it sees as a disproportionate tax increase.

Around every fourth adult in Germany smokes. The tobacco tax is therefore an important source of money for the state: Last year, the tax authorities received 14.7 billion euros. The tobacco tax was last increased in 2015.

All-day care and child bonus

The Bundestag decided on further points on Friday. Children who start school from summer 2026 should have a legal right to all-day care in the first four school years. On Friday, the Bundestag passed the corresponding “all-day funding law” of the grand coalition.

The legal claim comes a year later than planned. In doing so, the federal government was accommodating the states. These had demanded more time because of the high costs and also because of the practical implementation: In order to guarantee all-day places for elementary school students everywhere, billions in investments in rooms and equipment are still necessary in some federal states, and enough educators have to be found. In some countries, especially in eastern Germany, there is already comprehensive support.

According to the federal government, there are around 800,000 full-time places to be created. It is estimated that the expansion will cost five to seven billion euros.

From August, families with low incomes will receive an extra payment of 100 euros per child from the state. The Bundestag decided on Friday. The so-called leisure bonus is part of the “Corona catch-up program” with which the federal and state governments want to mitigate the long-term consequences of the long restrictions in education and leisure for children and young people. The program is worth two billion euros. It also supports tutoring, school social work, holiday camps or more positions in the voluntary social year.

The 100 euros can be spent on vacation, sport or leisure activities – “depending on your mood,” said Family Minister Christine Lambrecht (SPD). The payment goes to families who are dependent on Hartz IV, who are entitled to housing benefit or child allowance or who receive benefits under the Asylum Seekers Benefits Act. The draft law assumes around 2.7 million children. According to the Family Ministry, the 100 euros will be paid out “from August”. Most families do not have to submit a separate application for this.