Record prices explosion: New nicotine tax brings chaos for smokers!

Record prices explosion: New nicotine tax brings chaos for smokers!

Österreich - Austria faces a drastic reform in the area of tobacco and nicotine taxation. The Ministry of Finance is planning a new tax on nicotine bags and e-liquids, a measure that is justified as part of the budget renovation and to reduce consumption by higher prices. According to Kosmo , the so-called "risk-based consumption tax" is to bring in around 85 million euros in 2026.

In addition, an increase in tobacco tax is sought to generate a further 100 million euros. Critics of these measures, such as Ralf-Wolfgang Lothert from JTI Austria, describe the plans as "perfect madness". He warns of almost 200 million euros for the industry. In the past, tobacco tax increases generated only 35 to 40 million euros in additional income.

reactions from the industry

Wolfgang Streissnig, the federal gremical chairman of the tobacco matters, expresses concern about possible buyers abroad. This development could endanger the tax revenue because smokers could try to find cheaper offers beyond the borders. British American Tobacco has already announced that it will increase the prices for several brands to cover the costs.

The new "nicotine tax" is a central topic in the current political negotiations. An expansion of the existing tobacco monopoly to a “nicotine monopoly” is planned. Currently, classic cigarettes are already subject to a tax rate of 60 percent, while e-cigarettes and nicotine bags are only subject to the regular VAT of 20 percent.

international developments

from July 2022, liquids were taxed in Germany for e-cigarettes, with annual increases by 2026. From January 1, 2025, the tax is 0.26 euros per milliliter, which is an increase of EUR 0.20 per milliliter in 2024. These changes are part of the tobacco tax moderation law, which was introduced in 2021. This tax concerns all e-liquids, regardless of the nicotine content. The increase could significantly influence the prices, since a 10 ml bottle of liquid could be 1.60 euros more expensive, which could be around 3.20 euros by 2026.

The development of liquid tax could have negative effects on small companies and possibly lead to closures. Similar effects have already been observed in countries such as Italy and Greece. In addition, rising prices for e-liquids could lead to an increase in smoking rates, which in turn could drive health costs.

health and economic aspects

The introduction of tobacco taxes worldwide is to reduce tobacco consumption, promote public health and increase government income. While supporters emphasize their benefits for health programs and social projects, opponents argue that weak people in particular are disproportionately burdened. A holistic approach that combines tobacco taxes with comprehensive tobacco control measures could achieve the best results for economy and health, according to the opinions of experts.

In Germany, the tax on e-liquids leads to further challenges. According to Happy Liquid , the liquid tax could increase the prices significantly and is already controversial. An alliance for tobacco -free consumption considers the tax to be unconstitutional and has submitted a constitutional complaint that was not accepted.

Tax policy in this area is not only on the economic, but also on the health agenda of the federal states. How the individual measures ultimately implement and what effects they will show remains to be seen and will continue to trigger critical discussions.