Cigarettes in Germany almost slipped from guilty pleasure to illegal contraband on Wednesday after a clerical error brought forward a duty hike planned for January 1st.
Last Friday, the Bundestag parliament approved a Bill containing higher duty on tobacco that would increase the price of a packet of 20 cigarettes by about €4 to €12-€14.
Now the federal finance ministry has admitted the new law was published “in error” on Tuesday in the federal gazette.
The publication of any law in that publication activates it the following day: Wednesday, in this case.
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“A technical error occurred in the documents regarding the effective date,” acknowledged the ministry in a statement.
Alarmed tobacco companies contacted the finance ministry and state customs offices seeking guidance. They were caught off guard by the publication, and noted how the paper duty stamps and seals – at the new rate – had yet to be printed, let alone attached to their products.
Even worse: the clerical error implied that later tax increases, scheduled to come into effect by 2030, also kicked in on Wednesday – on paper at least.
“The federal government has to act very quickly to establish legal certainty for the continuation of production,” said Jan Mücke, spokesman for the Federal Association of Tobacco Products (BVTE).
He said members were uneasy about continuing to produce and distribute its products in what he called a legal “grey zone”.
On Tuesday afternoon, the finance ministry issued statements to say that cigarettes already in stores can still be sold off at the old tax rate.
The federal finance ministry alerted the customs authorities – which administer tobacco duty – not to apply the new law until January 1st.
“Words are all well and good,” countered Mücke, “but the law now applicable says something else. Just because the finance ministry messed up, we are in an intolerable situation.”
The slip prompted much head-shaking across the influential German tobacco industry, where firms are furious that months of lobbying failed to halt the duty hike.
The changes are expected to pump an additional €12 billion into the German exchequer in the next four years.
“It is astonishing that such an absurd error could happen within a federal ministry,” said Maximilian van Ackeren, head of the German Tobacco Industry Association. “A ministry drafts a law, only to say the next day, ‘Oops, that’s not what we meant at all!’ This is the kind of amateurism that leaves me completely dumbfounded.”
Currently one in four Germans aged 15 and over smoke at least occasionally – roughly the EU average and higher than the 16 per cent of the equivalent population in Ireland who do. An estimated 130,000 Germans die of tobacco-related illness each year.
