Federal government decides on sugar tax – less extensive than previously planned

The federal government wants to significantly reduce the planned sugar tax on beverages and at the same time exempt small manufacturers from it. On Wednesday, the cabinet gave the green light for appropriate formulation assistance from Finance Minister Lars Klingbeil (SPD), which is available to the Reuters news agency. The Bundestag factions of the Union and SPD should now discuss and implement these in parliament. The new tax is scheduled to start on July 1, 2027 and help stabilize costs in the healthcare system.

The basic idea is that the higher the sugar content, the higher the tax burden should be. According to the new template, there should only be two tax levels instead of the previously planned three. Drinks with five to less than eight grams of sugar per 100 milliliters should be taxed at 26 cents per liter, and 32 cents are due for eight grams or more. In an earlier version, 26 cents from five grams, 32 cents from seven grams and 38 cents from ten grams were planned.

There are exceptions for small and independent producers with an annual production volume of up to 70,000 liters. In addition, an exemption was added for companies with up to one million liters, as the Ministry of Finance announced. However, the European Commission still has to approve the state aid.