Vaping industry warns of black market if tobacco tax increase is planned

Berlin. Germany's vapers must prepare for slightly higher prices when buying liquids for e-cigarettes. The reason for this is the planned increase in tobacco tax, which enjoys broad consensus in federal politics. However, how significantly the tax rate should rise remains contentious: after the federal government proposed a rather moderate increase, the coalition factions of the CDU/CSU and SPD in the Bundestag are aiming for a stronger tax surcharge. This, in turn, is now causing unrest in the industry: the Alliance for Tobacco-Free Enjoyment (BfTG) association fears falling demand in the legal market and an increase in the black market.

Association chairman Dustin Dahlmann points out that the tobacco tax on liquids only increased this year by 6 cents to 32 cents per milliliter. Due to the associated price increases, the black market share rose from an estimated 40 to 50 percent. "This trend is likely to continue if the tax screw is turned heavily once again," says Dahlmann.

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

Industry representative Dahlmann also expects that the tax authority will receive significantly less tax revenue than expected. "That was already the case in 2022 during the amendment of the Tobacco Tax Act: back then, the Federal Ministry of Finance assumed 520 million euros in tobacco tax revenue from the sale of e-cigarettes in 2025; in reality, it turned out to be only 403 million euros." Consumption had indeed picked up, but so had the black market. "The federal government now risks repeating this mistake."

With e-cigarettes, liquids are heated and their vapor is inhaled. According to a survey by Heinrich Heine University Düsseldorf, the Debra study, around three percent of people aged 14 and older 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.

The fact that vaping releases significantly fewer harmful substances than burning tobacco cigarettes is undisputed. However, due to the lack of long-term studies, it remains unclear how harmful the remaining substances are to the body. Cancer researchers and medical professionals warn that the substances could cause significant damage and point out that the nicotine contained in most e-cigarettes is addictive. The fact that vaping is particularly popular among teenagers and young adults is also being watched with a hawk's eye by politicians.