Tobacco tax revenue targets criticized as unrealistic by German industry association

Berlin – Germany's Federal Association for the Tobacco Industry and Novel Products (BVTE) has strongly criticized the Federal Ministry of Finance's (BMF) projections for future tobacco tax revenues. The association argues that the ministry's targets are unrealistic and based on flawed assumptions.

BVTE's Chief Executive Officer, Jan Mücke, stated that the Finance Ministry is dismissing both the increased workload for customs authorities and empirical evidence showing that higher taxes lead consumers to illicit markets or cross-border purchases. "The Finance Ministry is making it too easy for itself," Mücke commented.

The association points to examples from the Netherlands and France, where tobacco tax hikes have resulted in decreased tax revenues and increased illegal trade. In the Netherlands, tax revenues dropped by 15 percent as over 60 percent of consumed tobacco products were purchased abroad. France expects a significant decline in tax revenues despite a reduction in legally sold products.

BVTE has repeatedly warned of these developments for months and urges the government to fundamentally reconsider the planned tax increases. The association emphasizes that political decisions must be grounded in reality and reliable data, not wishful thinking. According to BVTE, the proposed tax hikes could lead to increased smuggling, counterfeit products, and weaker consumer protection, while potentially reducing overall tax income.