The key facts

  • The Bundestag approved a tobacco tax increase from 2027 to 2030; the average price of a pack will rise from €8.05 to €11.36, premium brands — up to €14.
  • The government expects an additional €12 billion over four years; the revenues are not earmarked and will go into the general budget.
  • The AfD and Die Linke voted against, the Greens consider the increase insufficient; the industry warns of a growing black market.

Parliament approves phased tax increase

The Bundestag late on Thursday evening approved a phased increase in the tobacco tax, which will take effect each January from 2027 to 2030. The measure was backed by Chancellor Friedrich Merz's governing coalition — the CDU/CSU bloc and the SPD. According to the calculations embedded in the bill, the average price of a pack of 20 cigarettes will rise from the current roughly €8.05 to €8.77 in 2027, €9.56 in 2028, €10.42 in 2029 and €11.36 by 2030. Cigarettes of certain premium brands may cost up to €14; rolling tobacco will also become significantly more expensive. Final retail prices will be set by manufacturers, so they may vary by brand. On Friday, the Bundesrat will vote on the amendment to the tobacco tax law; no objections are expected, so the increase is expected to be approved.

Goals: budget and health

The government names two goals of the reform — consolidation of the federal budget and health protection. The measure is expected to bring in an additional around €12 billion over four years: roughly €1.5 billion in 2027, rising to €4.5 billion by 2030. Last year, the tobacco levy brought €17.6 billion into the treasury. The additional revenues have no earmarked purpose and will go into the general budget. SPD deputy Ingo Vogel acknowledged during the debate that the reform is partly aimed at balancing the budget, but also pursues a healthcare goal — making nicotine less attractive. “Inexpensive products, in particular, should not become an easy entry point into nicotine consumption, which is why we are raising the price threshold in this area,” he said. Taxes on cigars and cigarillos will rise less sharply than previously planned, while taxes on e-cigarette liquids will rise slightly more than expected. According to the 2025 microcensus, about 19% of people aged 15 and older smoke in Germany: 14% regularly and 5% from time to time. The German Cancer Research Center reported that in 2023, around 131,000 people died from tobacco-related diseases. Health experts consider price increases an effective way to encourage quitting smoking.

Criticism and black market concerns

The tobacco industry doubts that the state will receive as much revenue as it expects: its representatives warn that tax increases could push smokers to the black market or to cheaper cigarettes from other EU countries, and legal traders could suffer the most. CDU deputy Karsten Brodesser called for a more moderate increase, arguing the risk of falling tax revenues and harm to legal trade, but his proposal was not adopted. AfD deputy Christian Dürr saw a contradiction in the government's approach: while justifying the tax increase with health concerns, the coalition simultaneously expects revenue growth, which, in his view, means it does not actually expect consumption to fall. The AfD and the Left voted against the reform. The Greens in principle support a higher tobacco tax, but consider the planned increase too small. Vogel said that the concerns of customs officers and their union about the growth of the black market are taken “very, very seriously”: if demand shifts to illegal channels, “we will not only lose money, but will also face a great deal of work with criminal networks,” he added. Prices in Germany will still remain lower than in some of the most expensive tobacco markets in Europe, including Ireland, France and the Netherlands.