Germany news: 'Tech error' brings early cigarette tax hike
Quick Look
Germany's Finance Ministry admitted a technical error caused the early introduction of a steep tobacco tax hike expected to raise €12 billion over four years.
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Why It Matters
The tobacco tax hike received final parliamentary approval on Friday and was scheduled for the turn of the year.
Germany's Finance Ministry said that a "technical error" had led to the early introduction of a steep tax hike on tobacco products.
The hike received final parliamentary approval on Friday and had been scheduled to go into effect at the turn of the year.
Instead the changes officially gazetted on Tuesday stated that they would come into force on Wednesday.
"A technical error occurred in the documents regarding the effective date," said the Ministry, adding that a correction had been initiated.
The changes are expected to pump some €12 billion ($13.5 billion) in added tax revenue over the next four years.
However, tobacco companies will be unable to pay the higher rate due to the fact that new tax stamps are not yet available.
Currently, a 20-pack of cigarettes costs around €8-€10. The Finance Ministry expects that price to rise to between €12 and €14 per pack.
Roughly 1-in-5 people (19%) smoke in Germany, with around 130,000 dying of tobacco-related illness each year.
Open Questions
- When will the correction take official effect?
- When will new tax stamps become available?
