A dispute has surfaced in Berlin over Germany’s proposed tobacco tax increase. The German Customs and Finance Union (BDZ) warned that the tax hikes could act as a stimulus for criminal syndicates unless the government hires 3,000 additional customs officers to police the illegal market.
Under the draft legislation from the Federal Ministry of Finance, the price for 20 cigarettes will rise incrementally to roughly €11.40 by 2030. While the ministry projected minor, one-time personnel expenses, the BDZ projects annual costs of €250 million to €300 million for enforcement.
Thomas Liebel, head of the BDZ, told BILD: “The state wants to collect billions extra from smokers. Then it must also ensure that smugglers and illegal tobacco factories do not become the big winners. Without stronger customs, the tax increase threatens to become an economic stimulus program for the tobacco mafia.”
The union expects consumers to evade higher prices by turning to unregulated channels, citing particular risks in shisha tobacco, e-cigarettes, and illicit domestic cigarette factories.
The Ministry of Finance rejected the union’s assessment, stating: “The calculations are incomprehensible and lack any serious basis.” The ministry maintained that claims of consumer flight to illegal markets lack independent empirical evidence, adding that final staffing requirements will be determined once parliament finalizes the law.
