Germany plans major tax hikes on tobacco, alcohol and sugar to raise billions

The German government, led by Finance Minister Lars Klingbeil (SPD), intends to raise substantial revenues by sharply increasing taxes on tobacco, alcohol and introducing a new sugar levy. The tobacco levy is proposed to rise to €9.10 per pack next year and could reach €14 by 2030, aiming to generate €1.5 billion extra in 2024 and €4.4 billion by 2030, boosting total tobacco tax revenue to roughly €22 billion. A separate alcohol‑tax reform slated for 1 January 2027 would raise the levy on spirits such as rum, vodka and grain liquor by 20 percent, while beer and wine remain exempt, expected to yield about €455 million annually. A sugar tax is also planned, projected to bring in around €0.5 billion per year.

A poll by Forsa for the Kaufmännische Krankenkasse shows strong public support for higher alcohol taxes, yet many doubt the measures will curb consumption, fearing a shift to untaxed beverages or cross‑border purchases. Experts warn that higher tobacco duties may boost organised‑crime profits through smuggling and illegal production, describing the plan as a "stimulus program for organised crime". Critics also question the administrative burden of the sugar levy relative to its modest fiscal gain.