Planned tobacco tax increase for e-cigarettes is causing unrest

Germany's vapers have to be prepared for slightly higher prices when they buy their liquids for e-cigarettes. The reason for this is the planned increase in tobacco taxes, which is largely agreed upon in federal politics. However, it is controversial how much the tax rate should increase: After the federal government proposed a rather moderate increase, the coalition factions made up of the CDU/CSU and SPD in the Bundestag are aiming for a larger tax surcharge. This in turn is now causing unrest in the industry: The Alliance for Tobacco-Free Enjoyment (BfTG) fears a falling demand from legal businesses and an increase in the black market.

The association chairman Dustin Dahlmann points out that the tobacco tax on liquids only increased this year by 6 to 32 cents per milliliter. Because of the associated price increases, the black market share has increased from an estimated 40 to 50 percent. “This trend is likely to continue if the tax screw is tightened again,” says Dahlmann.

How expensive it could be

The Federal Ministry of Finance proposed an increase of one cent to 33 cents per milliliter by January 2027, the coalition factions are now in favor of an increase of three cents to 35 cents. VAT is calculated on this tax surcharge - the higher the tax surcharge, the higher the VAT will be. A typical 10-milliliter bottle, which currently costs roughly 12 euros in stores, could become 36 cents more expensive due to taxes, according to the industry alliance. That would be a three percent price increase for vaping liquids.

Industry representative Dahlmann also expects that the tax authorities would receive significantly less tax revenue than expected. “That was already the case in 2022 when the Tobacco Tax Act was amended: At that time, the Federal Ministry of Finance assumed that tobacco tax revenue from the sale of e-cigarettes would be 520 million euros in 2025, but in fact it was only 403 million euros.” Consumption has increased, but so has the black market. “The federal government is now threatening to repeat this mistake.”

Cancer researchers warn against vaping

With e-cigarettes, liquids are heated and their vapor is inhaled. According to a survey by Düsseldorf's Heinrich Heine University, the Debra study, around three percent of people aged 14 and over in Germany use e-cigarettes. The vaping industry emphasizes that its products release far fewer harmful substances than tobacco cigarettes and that vapes are therefore suitable as alternative products for tobacco smokers.

It is undisputed that vaping releases significantly fewer harmful substances than burning tobacco cigarettes. However, due to the lack of long-term studies, it is unclear how harmful the remaining substances are to the body. The substances could cause significant harm, warn cancer researchers and doctors and point out that the nicotine contained in most e-cigarettes is addictive. Politicians are also watching like a hawk that vaping is particularly popular among teenagers and young adults.