Germany tobacco tax revenues fall 11.5% in seven months

Tobacco tax revenues in Germany fell by 11.5 percent during the first seven months of 2026, totaling 8,542 million euros according to data from the Federal Ministry of Finance. This decline is primarily driven by a 13.5 percent drop in the volume of taxed cigarettes, which fell to 35.4 billion units.

Fine-cut tobacco sales also saw a 7.7 percent decrease in volume, leading to a 1.5 percent drop in tax revenue for that segment. These trends follow the implementation of the final stage of a previous tobacco tax reform on January 1, 2026.

The Federal Association of the Tobacco Industry and Novel Products (BVTE) has warned that rising taxes may strengthen the illegal market. BVTE Managing Director Jan Mücke stated that organized criminal groups stand to benefit from higher prices and larger price gaps between legal and untaxed products. As legal cigarettes become more expensive, the association warns that price-sensitive smokers may turn to smuggling and illegal production, which bypasses tobacco, sales, and customs taxes.