Are e-cigarettes expensive

E-cigarettes are likely to get more expensive

Those who use e-cigarettes or tobacco heaters have to be prepared for higher prices. The federal government decided on Wednesday in Berlin to reform the tobacco tax.

In future, electronic cigarettes and their liquids will not only be subject to sales tax, but also tobacco tax - significantly more tax than before. The tobacco heaters, in which tobacco is only heated and not burned, should no longer be taxed like pipe tobacco, but like normal cigarettes and thus also higher than before. According to industry information, the retail price of these product groups could rise by up to 100 percent - exactly how much is unclear.

Most recently, the tobacco tax was raised in 2015, from 2022 the state intends to increase taxes again and justifies this with the protection of health. In addition, the tax authorities want to take in: In 2022, the additional tax revenue from the reform should be 1.2 billion euros, this annual increase should increase to 3.5 billion euros by 2026.

Conventional tobacco cigarettes are also likely to become more expensive, but less so. The tax is expected to rise by an average of eight cents a year per pack of normal cigarettes. A pack currently costs roughly seven euros domestically.

The tobacco industry is criticizing the significantly higher taxes on tobacco heaters and e-cigarettes - the industry relies on these alternative products to secure its business in the long term and to polish its image, which has been tarnished in view of the high risk of cancer. The quite new products are considered to be less harmful to health - but they are also bad for health.

Philip Morris managing director Claudia Oeking called it "sensible that moderate, steadily increasing tobacco taxes on combustion products such as cigarettes [...] are proposed". The now targeted tax increase would “create an absurd steering effect from expensive, demonstrably reduced-pollutant products to significantly cheaper and more harmful combustion products”.

From the point of view of the tobacco industry and the police union (GdP), the reform in its current form would have an undesirable side effect: it could fuel the black market because, given the higher prices on the legal market, more smugglers enter the business - this in turn could ultimately result in the state get much less tax revenue than previously assumed.

The professional association of paediatricians, on the other hand, rated the project positively because the cigarette alternatives would be more expensive and therefore less attractive for young people. In the case of alcopops, it was seen that a tax hike could discourage teenagers from consuming these products, according to the association. "We are convinced that a tax increase can also have a steering effect on e-cigarettes."

The Bundestag has not yet given its approval for the reform to be valid. The Greens expressed criticism. "It is right that tobacco heaters and e-cigarettes should be taxed higher, because these products are harmful to health," said the Bundestag member Stefan Schmidt. He believes that equating the new products with normal cigarettes in terms of taxation is “not appropriate because tobacco heaters and e-cigarettes are less harmful to health than cigarettes”. Smoke and steam products should therefore be taxed according to their harmful potential: the more harmful the product, the higher the tax.

Even from the ranks of the governing coalition there was opposition to the proposed law from the SPD-led Federal Ministry of Finance. The CDU politician Antje Tillmann said it was right to finally include nicotine-containing liquids in tobacco taxation. "This step is overdue." With a view to the planned significant tax increase for cigarette alternative products, she said: "Any lower harmfulness must be reflected in the level of taxation on cigarettes and e-cigarettes."

© dpa-infocom, dpa: 210324-99-955195 / 4