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[POLITICS] · Germany · 29 sources

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Germany reaches agreement on sugar and tobacco tax increases

The German government coalition has reached a compromise regarding the introduction of a sugar tax and an increase in tobacco taxes to support the national budget.

The sugar tax is expected to take effect on July 1, 2027. To protect smaller manufacturers, a production threshold of 70,000 liters per year has been established, though authorities are exploring expanding this limit to one million liters. The tax will follow a two-tier structure: 26 cents per liter for beverages with 4.5g of sugar per 100ml, and 32 cents per liter for those with 7g per 100ml. Finance Minister Lars Klingbeil has abandoned plans for a third, higher tax tier.

Simultaneously, the coalition has agreed on a modified tobacco tax increase. Cigarette prices are projected to rise to approximately 9.10 euros per pack in 2027, with average prices expected to reach 11.78 euros by 2030. While the government anticipates significant revenue increases, critics and industry associations have raised concerns regarding potential increases in cigarette smuggling and the economic burden on consumers and small businesses.

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CDU/CSU · Coca-Cola · German Bundestag · German Federal Ministry of Finance · German government · Germany · Lars Klingbeil · PepsiCo · SPD · Thorsten Frei

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