Pro Rauchfrei comments on the EU Commission’s proposal to amend the Tobacco Tax Directive
07.09.2025 As part of “Europe’s plan against cancer”, the EU Commission wants to promote the emergence of a “smoke-free generation” so that less than 5% of the population smokes by 2040. Significant increases in tobacco tax are one of the most effective ways to achieve this. The EU Commission has now presented a proposal to revise the Tobacco Tax Directive.
In its proposal to revise the EU Tobacco Tax Directive, the EU Commission envisages continuous increases in tobacco tax. This is right and fair, as the policy has so far allowed the tobacco industry to largely pass on the immense costs caused by smoking and passive smoking to the general public.
In its Tobacco Atlas 2025, the German Cancer Research Centre (DKfZ) puts the costs caused by smoking in the healthcare system and the economy at 97.2 billion euros per year. 30.3 billion euros are incurred as direct costs in the healthcare system. In addition, indirect costs totalling 66.9 billion euros burden the economy due to loss of resources as a result of death and incapacity to work during care, rehabilitation and unemployment. This leads to lower tax revenues due to reduced productivity and contributes significantly to the high health insurance premiums.
In 2024, this contrasted with tobacco tax revenues of just 15.6 billion euros. Germany should no longer allow the tobacco industry to largely pass on the costs caused by smoking to the general public. In order to compensate for the direct and indirect costs of smoking through the price of cigarettes, a packet of cigarettes would have to cost more than 22.80 euros, according to the Tobacco Atlas figures.
We need significant and continuous increases in tobacco tax in Germany, ideally within a European framework. The range that has been possible up to now means that lower prices in one Member State can undermine the health protection aimed at by higher prices in another Member State. Harmonisation at a high level is therefore necessary, in which the level of taxation reflects the overall economic costs of smoking.
The legal amendments proposed by the EU Commission point in the right direction and we support them in principle. However, they are not sufficient. In the forthcoming discussions in the Council, Germany should therefore advocate for the proposal to be improved on key points. In order to make the most effective, sustainable contribution to health protection and reduce tobacco-related welfare losses, the revision should come as close as possible to the following objectives:
- Defining tobacco duty as a specific excise duty, not an ad valorem excise duty or a combination of both.
- Regularly adjust the specific excise tax, which makes tobacco less and less affordable. This should not only take inflation into account, but should make tobacco and related products more expensive relative to other products. In order to achieve a steering effect, these adjustments must lead to clearly noticeable price jumps. An annual increase of 15% + inflation rate would be conceivable, for example.
- Tobacco tax share of at least 70% of the retail price for all product categories.
- Comparable taxation of the various product categories.
Pro Rauchfrei has issued a statement to the EU Commission and the German government.