German coalition politicians are pushing for higher tobacco taxes to relieve the country’s loss-making statutory health insurance system, saying rising prices would curb smoking and generate needed revenue.

Hendrik Streeck told Bild that tobacco consumption claims “around 131,000 lives every year” in Germany and leads to “over €30 billion in direct health costs” as well as “almost €70 billion in economic consequences”.

He said higher taxation remains “one of the most effective tools for protecting public health”.

Hans Theiss, another conservative lawmaker from Chancellor Friedrich Merz's CDU/CSU alliance, said increased tobacco taxes could fund a cut in VAT on medicines from 19% to 7%.

“Through the VAT reduction, the insurance funds would have up to €7 billion more available annually,” he said, adding that the shift would help ease long-term financial pressure.

Karl Lauterbach of the Social Democrats also backed the proposal and said taxes on alcohol should rise too. “A tax increase would reduce consumption,” he told the newspaper.

He added that extra revenue could be directed into the health system “to relieve statutory health insurance funds”.

Under the proposal, the average price of a 20-pack of cigarettes would rise from roughly €9 to about €11.

The current tobacco tax on a standard pack stands at approximately €3.60.

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