With the draft measure first published last February by the German Ministry of Finance, the law that comes into force on July 1, 2022 will have updated tobacco taxes for the first time in a decade.

Unfortunately, the amendment will result in taxation of safer alternatives in the same way as regular tobacco products. From 2022 and until 2023, products containing nicotine will be taxed at 0.02 euro per milligram of nicotinic alkaloids, and this amount will be increased to 0.04 euro per milligram in 2024.

The tax will only modestly increase taxes on regular cigarettes

“Due to the considerable tax burden on, for example, liquids, a black market for tax evasion will inevitably develop.”

This means that the measure will significantly increase taxes on vaping liquids, tripling their price, while only moderately increasing taxes on regular cigarettes. Director of the World Vapers’ Alliance (WVA), Michael Landl said that eventually these taxes will have the opposite effect to that desired.

“The government says these taxes will improve public health, but the reality is exactly the opposite. As a less harmful alternative, vaping needs to be more affordable than smoking, to get smokers to quit. If governments want to reduce the public health burden of smoking, they must make vaping more affordable and accessible, not less ”.

In addition, the opposition Liberal and Green parties, as well as the German police union stressed that this high tax would only provide a “start-up for smugglers and counterfeiters”, and the German customs union, BDZ, said the tax would only fuel a black market. “Due to the considerable tax burden on, for example, liquids, a black market for tax evasion will inevitably develop.”

Raising taxes on safer alternatives increases smoking rates

Consistent with these arguments and the findings of countless studies, recent research funded by the National Institutes of Health in the United States has indicated that, indeed, raising taxes on e-cigarettes in an effort to curb vaping is counterproductive. productive. The study found that such taxes only cause former smokers to revert to traditional (and more harmful) cigarettes.

Entitled, “The Effects of E-Cigarette Taxes on E-Cigarette Prices and Tobacco Product Sales: Evidence from a Panel of RetailersThe study aimed to examine the effect of taxes on electronic cigarettes adopted in eight US states. Using data from 35,000 national retailers between 2011 and 2017, the researchers found that for every 10% increase in e-cigarette prices, e-cigarette sales fell by 26%. However, the same 10% increase in e-cigarette prices resulted in an 11% increase in traditional cigarette sales.

“We estimate that for every e-cigarette pod that is no longer purchased due to an e-cigarette tax, an additional 6.2 packs of cigarettes are purchased instead,” said Michael Pesko, co-author of Georgia State University study and economist.

Economic research: High taxes on e-cigarettes lead to higher smoking rates


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