Klingbeil’s indirect taxes – billions more burden for citizens

“We have a coalition agreement, and there is no tax increase in it, and there will not be one either.” That is what Friedrich Merz said to Caren Miosga in April 2025, shortly after the coalition agreement was concluded. In the same conversation he added that one should never say “never”.^[1] During the negotiations Markus Söder had already stated: “Tax increases are completely ruled out.”^[2]

Formally that is even true. Income tax is not rising, and neither is VAT. Instead come taxes that appear on no payslip and on no tax assessment. You notice them only in the supermarket, when the lemonade, the yoghurt pot or the bottle of Korn costs a few cents more. Nobody has to fill in a form or make a transfer for them. That is precisely why they are politically so convenient.

I am a drinks entrepreneur. My company is hit by each of these three taxes. And I say it plainly: no problem is being solved here, a promise is being circumvented. The price is paid twice over by consumers and by small and medium-sized businesses: at the till and in administration.

Three taxes, one principle

Together that is around 2.9 billion euros a year from 2028, almost 1.5 billion of it from the plastic tax alone. Spread over around 41 million households, that would be around 70 euros per household per year if the costs are passed on in full.^[6] That is my own rough calculation, not an official figure. And because VAT is charged on the higher final price, the customer ends up paying tax on the tax: everything the customer pays belongs to the taxable amount, and only VAT itself is deducted.^[11]

On sugar and plastic there is no need even to argue about pass-through. For the sugar tax the federal government itself writes that it is designed so that the burden is transferred to end customers; price increases “in the double-digit cent range” are to be expected.^[12] The draft on the plastic tax expects effects on individual prices and on the consumer price level; this tax too is designed to be passed on to end customers.^[5][13] A tax increase that is not called one remains a tax increase all the same.

Only on alcohol duty does the federal government see it differently. Effects on the consumer price level are “not to be expected”, says the draft of the budget accompanying act.^[4] An example from my sector: a 0.7 litre bottle of Korn at 32 per cent alcohol currently carries 2.92 euros of alcohol duty; from January 2027 it would be 3.50 euros. With VAT the bottle would then cost around 70 cents more, if retail passes the duty on. That too is my calculation, with the rates from the draft.^[4]

What is planned for the plastic tax

It is not only plastic bottles and films that are to be taxed. All transport and packaging materials made of plastic are covered, including stoppers, lids, capsules and closures. Corrugated board boxes, folding cartons, paper sacks, cans, tubes and even metal crown caps fall under it as soon as they contain 50 grams of plastic per kilogram, that is 5 per cent. The plastic they contain is then taxed.^[5][14]

Liable is whoever makes the packaging in Germany, obtains it from another EU state or imports it from a third country.^[5][13] The draft calls making it “extraction”. Packaging law does not know this term at all so far, says the plastics association Plastics Europe.^[10]

What it is really about is also in the draft: the tax is to bring in, permanently, an amount equal to the German contribution to the EU plastics levy.^[5] The member states have been paying this contribution since 2021, at 0.80 euros per kilogram of non-recycled plastic packaging waste.^[15] According to a report in neue verpackung, most other states have not passed it on to companies through a comparable tax.^[13] Berlin wants to hand the bill on to the supermarket till.

How absurd it gets in the detail

The reusable crate is taxed like single-use film. The draft does not distinguish between single-use and reusable.^[14] A drinks crate that circulates for years is treated exactly like a film that is in the bin after a day. Even Deutsche Umwelthilfe, which welcomes such a tax, demands that it must under no circumstances be levied on reusable packaging.^[16] For an act that is supposed to avoid plastic, that is an own goal.

Recycling pays off only on paper. Anyone using recycled material pays the full tax first. Relief comes only once the finance ministry has laid down by ordinance what the proof looks like. That also requires a new system of proof in packaging law. The draft names no date.^[5][14] In the United Kingdom, by contrast, the tax is not payable at all if a packaging contains at least 30 per cent recycled material.^[17]

Whoever exports still pays first. If taxed packaging is delivered abroad, the money comes back only on application, and only above a deductible of 550 euros a year.^[5][14]

Every gram counts. The tax is assessed on the weight of the plastic. It has to be declared monthly by the 10th and paid by the 20th of the following month. Customs officers may take samples in businesses free of charge. There is no exemption for small and medium-sized businesses.^[5][14]

One hour of familiarisation. The draft assumes just under 118,000 parties involved and allows 60 minutes for each of them to get to grips with the new tax.^[5] Anyone who has ever mapped an excise duty into their merchandise management system knows how realistic that is.

Who is supposed to check all this?

Customs. For the plastic tax the draft provides for 788 additional posts at customs, 28 at the federal IT service provider and 3 at the finance ministry.^[5] With the sugar tax, according to its first draft, around 227 posts would be added. Together that is 1,046 new posts and around 74 million euros of staff costs a year.^[7][18]

For the plastic tax the draft reckons on around three million import declarations and more than 300,000 tax returns a year.^[5] Who is actually going to check how many grams of plastic are in a parcel that an Asian online trader sends straight to a private household? How import control is to work in practice is, in the assessment of Plastics Europe, an open question.^[10] So in the end the ones who get checked are mainly those who are easy to find anyway: German small and medium-sized business.

The associations themselves consider even the 788 customs posts too few. Depending on the circle of those liable, they reckon on around 2,000 additional customs officers. The customs union BDZ signed up to this too.^[19] When even the people who are supposed to implement it warn against the act, one should listen.

What comes attached in bureaucracy

According to the draft the plastic tax costs business 44.1 million euros a year.^[5] The associations estimate at least 600 million euros, that is more than thirteen times as much.^[19] The federal government itself reckons on costs of 283.5 million euros up to 2029 and, after that, around 103.6 million euros a year permanently.^[5]

Adding together the federal government’s ongoing costs and the officially estimated costs for business, around 10 per cent of the revenue goes on collection alone. With the associations’ estimate it is just under half. That too is my own calculation on the basis of the figures named. But it shows the principle: a large part of this tax mainly finances the apparatus that collects it.

On top of that, for many kinds of packaging two other systems already exist. Producers register their packaging with a dual system for a fee and report the type of material and the mass to the central packaging register.^[20] Since 2024 the single-use plastics fund at the Federal Environment Agency has been added, with its own registration via an ELSTER certificate, its own annual volume report by 15 May and its own levy assessment.^[21] By the Federal Environment Agency’s estimate around 56,000 producers are liable there.^[22] Now a third body follows: customs, with a duty to notify, a monthly return and tax supervision in the business. Three bodies, three reporting routes, one bag of crisps.

On the sugar tax it is no better. Under the first draft, producers and parts of the wholesale trade were to go into a tax warehouse system with duties of authorisation, documentation and reporting.^[23] For customs and IT around 89 million euros were earmarked from 2026 to 2029.^[24] In the view of the food industry it is impossible to follow how the compliance cost for business was calculated; the businesses affected were not consulted about it.^[24]

Pushed through rather than debated

How the whole thing is to be adopted fits the picture. According to the associations the plastic tax was not to come as an act of its own but by way of an amendment to the ongoing 2027 budget accompanying act, without prior involvement of the ministries concerned and without the cabinet considering the actual text of the act.^[19] On 6 July 2026 the cabinet had adopted only the revenue target, with the draft budget.^[5] In February 2026 the federal environment ministry was still saying: “The introduction of a nationwide ‘plastic tax’ is not currently envisaged.”^[25]

The sugar tax too is not coming before the Bundestag as a bill from the federal government. On 14 October 2026 the cabinet adopted drafting assistance which the coalition parliamentary groups are to table themselves.^[3]

Austria dropped such a levy in April 2026. Its economics minister gave this reasoning: what mattered was to relieve businesses rather than burden them; the country would continue to rely on recycling and deposits.^[26]

Barely saving on Bürgergeld, collecting from everyone

Where does the hunger for new taxes come from? A look at the spending side helps. The reform of Bürgergeld into the new basic income support, in force since July 2026, saves across all public budgets, according to the federal government’s bill, 86 million euros in 2026 and 70 million euros in 2027. From 2028 it actually costs slightly more.^[27][28] In September 2025 Friedrich Merz had demanded savings of around five billion euros.^[29] The then labour minister Bärbel Bas (SPD) said in May 2026: “Reform does not automatically mean cuts.”^[30]

In the 2027 budget accompanying act the two stand side by side: 455 million euros a year more in alcohol duty and around 78 million euros a year less spending on basic income support for jobseekers, because the standard rates are in future to be uprated differently.^[4] For basic income support for jobseekers the federal government budgets around 50.8 billion euros in total for 2027.^[31] Counting the municipalities’ spending and the gap in health insurance, our report on Bürgergeld arrives at around 71 billion euros a year. That is not an official total and not a saving potential of that size. But it shows where the large amounts lie.

All three taxes come from departments under SPD leadership: alcohol and sugar taxes from Lars Klingbeil’s federal finance ministry, the plastic tax prepared by the finance and environment ministries.^[3][4][16] I read it this way: on Bürgergeld the SPD wants to save as little as possible, and at the till it goes into everyone’s pocket. Including the pockets of people on Bürgergeld. They pay the new taxes when shopping like everyone else. Higher prices feed into their standard rate only with a delay: under the draft, what counts is the development of prices up to the end of June of the previous year. The sugar and plastic taxes would arrive there in 2029 at the earliest.^[4]

In fairness this belongs here too: the Union is going along with it. The cabinet under Friedrich Merz adopted the alcohol duty with the draft budget, and the sugar tax on 14 October. The plastic tax is a draft from both coalition parliamentary groups.^[3][4][5]

The Union still holds it in its hands

There are members of parliament in the Union who take their word seriously. According to BILD, 24 Union members have stated in writing that they will not agree to the plastic tax; the federal government has had to put the tax on ice for the time being.^[8] In September the CDU budget politician Andreas Mattfeldt put it plainly on the sugar tax: “You simply cannot explain nonsense like that to people.”^[32]

But on ice does not mean stopped. Whether the plastic tax will come has, according to the report, not yet been decided.^[8] The cabinet has adopted the sugar tax, and the coalition had agreed on it.^[3] The alcohol duty is in the 2027 budget accompanying act, on which the budget committee heard experts on 12 October.^[4][9]

What belongs to a fair assessment

The taxes have their reasons. The sugar tax is meant to bring manufacturers to put less sugar into drinks; its revenue is to keep statutory health insurance contributions stable. The federal government is thereby following a recommendation of the health finance commission.^[12] The alcohol duty is meant to help consolidate the federal budget.^[4] The plastic tax is meant to counter-finance the EU contribution.^[5] Deutsche Umwelthilfe welcomes it in principle.^[16]

My demands on the coalition

So that no misunderstanding arises: at MBG we are reducing the sugar in our recipes because our customers want that. We need no new tax for it. What we need is planning certainty, fewer forms and a politics that keeps its promises even when that is uncomfortable.

First: stop the plastic tax for good. Not pause it, scrap it. Germany has been paying the EU contribution since 2021, so far without a tax of its own for it.^[15]

Second: no act by fast-track procedure. Every new excise duty needs a legislative procedure of its own, a hearing of the sectors concerned and an examination by the national regulatory control council.

Third: honest costs on the table. Before over 1,000 new posts are created, it has to be disclosed what the taxes actually cost companies, the state and consumers.

Fourth: save first, then collect. Anyone levying new taxes at the till must first show that they have made serious savings on the large items of spending, Bürgergeld included.

Fifth: keep your word. “No tax increases” also means: no tax increases that are hidden at the till.

Citizens notice it at the latest when they go shopping. And they will remember who promised them something different.

Andreas W. HerbCEO MBG Group, Paderborn