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Increase in Cigarette Price Reduces Tax Revenue

Recent price increases for cigarettes in Germany will not bring more money into government coffers, according to the Association of Cigarette Manufacturers (VdC). The organization expects to sell up to 20 percent less in 2004 and says many smokers are switching to rolling their own cigarettes with cheaper tobacco or smuggled goods. According to tobacco tax statistics, revenue declined in April by 13.1 percent, compared to the previous year. The German government had expected to get an additional €1 billion ($1.22 billion) to augment the health care budget.

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