BVTE warns against EU plans

Die Tabak Zeitung // A few days ago, the Committee on European Union Affairs in the German Bundestag held a public hearing on the planned EU budget for 2028-2034, which is set to reach a record volume of two trillion euros.

Plugging EU budget holes
In this context, the German Association of the Tobacco and Novel Products Industry (BVTE) warns against plans to finance the future EU budget through drastic tax increases and additional company levies.
“The EU wants to plug holes in the budget with new levies instead of strengthening competitiveness and reducing bureaucracy. This will further weaken the European economy in global competition,” said Jan Mücke, Managing Director of BVTE.

Additional levy
In future, large companies with an annual turnover of more than 100 million euros will have to pay an additional levy. At the same time, it is planned that the member states will pay 15 percent of their tobacco tax revenue to Brussels. To make this possible, the Commission is planning drastic increases in the EU minimum tax rates: 138% for cigarettes, 258% for fine cigarettes and as much as 1093% for cigars. Germany alone would have to transfer over two billion euros a year to Brussels as a result – revenue that would be lost to the federal budget.

“Pure castles in the air”
“The EU Commission’s budget plans are pure castles in the air. Drastic increases in tobacco tax have never led to additional revenue. The opposite is the case: consumers are evading the tax and the illegal trade is increasing. If the price of a pack of cigarettes is increased by more than 40 percent to twelve euros, the black market will explode – the proportion of untaxed cigarettes in Germany is already over 20 percent today,” warns Mücke.

Massive interference
The BVTE also sees a massive interference in the fiscal sovereignty of the member states. Mücke: “Brussels wants a share of the tobacco tax, even though it has no tax collection powers of its own. This is an erosion of tax sovereignty, which lies with the individual member states. The Federal Government and the Bundestag must resolutely oppose these plans.”