Germany to raise cigarette tax, pushing pack price past 20,000 won

The German government plans to raise the tobacco tax to 6.19 euros ($7) per pack by 2030. The current tax stands at 4 euros per pack, and once the increase takes effect, the total price of a pack is expected to exceed 20,000 won.

German media outlet RND reported that the Federal Finance Ministry plans to gradually raise the tobacco tax from the current 4 euros per pack to 6.19 euros by 2030 — 40 percent more than the government had originally planned.

The average price of a pack of cigarettes is projected to rise from 9.10 euros next year to 9.91 euros in 2028, reaching 11.78 euros in 2030.

The government decided to boost tax revenue through tobacco levies after cuts to national health insurance subsidies — part of its healthcare reform agenda — came in smaller than initially planned. The government estimates the tobacco tax hike will generate an additional 800 million euros per year, growing to 4.5 billion euros more than current levels by 2030.

The government is also pursuing a 20 percent increase in the excise tax on distilled spirits, excluding beer and wine, which is expected to bring in an additional 450 million euros annually.

In the budget plan for next year finalized earlier this month, the Finance Ministry set total expenditure at 555.4 billion euros — up 30.9 billion euros, or 5.9 percent, from this year. Regular defense spending, excluding a special fund established at the outset of the war in Ukraine, rose 32.6 percent from this year to 109.7 billion euros.

When the Ukraine support fund and a special fund for infrastructure and climate protection — both spent outside the regular budget — are included, Germany's new debt next year is projected to reach 203.6 billion euros.