Germany will begin legalizing cannabis in around two weeks. In an article in the ORF business magazine “Eco”, Thomas Bieber from the Institute for Financial Law, Tax Law and Tax Policy at the JKU explained the possible effects of releasing the drug in Austria from a tax law perspective.
How would cannabis be taxed? According to Bieber, in Austria everything that can be smoked falls under the tobacco tax law – cannabis flowers are no exception. “Comparable to smoking tobacco, a tax rate of 34 percent would apply.” So if a gram costs ten euros, 3.40 euros would go into the state treasury.
In Germany it is currently hoped that around 2.5 billion euros more tax revenue will be generated from the sale of cannabis per year.
One of the main arguments of legalization advocates is always that approval could dry up the black market. Bieber is ambivalent about this argument: “Cigarettes are legal in Austria, but there is still a large black market. Last year, ten billion euros were probably smuggled past the state.”
If cannabis were to be legalized in Austria, one would have to choose the tax rate carefully, according to Bieber.
