Germany Eyes Tobacco Tax Hike to Protect Public Health

(MENAFN) German coalition lawmakers unveiled plans Friday to dramatically increase tobacco levies, aiming to inject billions into the nation's struggling statutory health insurance system confronting severe financial deficits.

Bild newspaper reported conservative parliamentarian Hendrik Streeck emphasizing the devastating toll of smoking: "Tobacco consumption costs Germany around 131,000 lives every year and causes over €30 billion ($36 billion) in direct health costs as well as almost €70 billion ($83 billion) in economic consequences."

Streeck underscored that elevated tobacco taxes represent among the most powerful mechanisms for safeguarding public health.

Fellow conservative legislator Hans Theiss, serving in Chancellor Friedrich Merz's CDU/CSU alliance, proposed channeling tobacco tax revenues toward slashing value-added tax on medications from 19% to 7%. "Through the VAT reduction, the insurance funds would have up to €7 billion ($8 billion) more available annually," Theiss stated.

Karl Lauterbach, a prominent Social Democrats (SPD) lawmaker from Chancellor Merz's coalition partner, backed the initiative while advocating for parallel alcohol tax increases.

"A tax increase would reduce consumption," the former health minister told the publication, noting the supplementary revenue could strengthen the healthcare system and ease pressure on statutory insurance programs.

Implementation would push average cigarette prices from €9 ($11) per 20-pack to approximately €11 ($13). Current tobacco taxation stands at roughly €3.60 ($4.30) per pack.

MENAFN31012026000045017169ID1110676560