BERLIN: What a surprise. German elections were less than a week ago and suddenly all talk in Berlin has shifted to tax increases in Chancellor Gerhard Schroeder’s victorious centre-left alliance with the Greens.

Smokers, whom everybody likes to punish, will likely have to start paying a lot more for their puffs, the government says.

Health Minister Ulla Schmidt wants raise tax by 0.05 euros (0.049 dollars) per cigarette to fill the government’s empty coffers.

“I think people will understand if it’s a purpose-oriented fee only for healthcare benefits,” said Schmidt in a ZDF TV interview.

The other beloved milk cow of Finance Minister Hans Eichel — car drivers — may also feel more pain.

Senior members of both the Greens and Schroeder’s Social Democrats (SPD) called Friday for a continuation of year-by-year petrol tax increases. The Greens also want to close loopholes in the present law and impose a tax on jet fuel which is currently exempt.

Schroeder’s government has already passed legislation raising Germany’s petrol taxes by a further 0.15 euros per litre during the period 1999 to 2003. Electricity, heating oil and natural gas taxes have also been jacked up.

Alone in 2002 these new taxes are bringing the government a cool 14.3 billion euros which is mainly being used to bail out the creaking state pension system.

Dubbed the “ecology tax” the increases are supposed to make people drive less, save energy and thus help the environment.

Schroeder had vowed not to impose any further petrol tax hikes but given stronger voter support for the Greens in last Sunday’s election — which in effect saved his government — it remains unclear if the chancellor can stand firm. Members of his party are beginning to waver and SPD environmental expert Michael Mueller expressed support for a new wave of petrol tax hikes.

But signs of a brewing SPD battle over the issue were evident by swift rejection of the idea by party parliamentary leader, Franz Muentefering.

“We remain by our clear ‘no’ to further increases,” said Muentefering.

There’s no such hesitation on increasing inheritance tax and imposing a special new tax on wealth.

SPD premiers of Rhineland-Palatinate and Schleswig-Holstein states, Kurt Beck and Heide Simonis, said this was already a done deal and would rake in up to 5 billion euros a year for the state.

Raising property taxes is a further option under consideration.

The trade union Ver.di, which strongly backed Schroeder, has demanded that property taxes go up. Germany has a lower rate of home ownership than many European countries and most people with middle and lower incomes rent their apartments.

German business is aghast over the possible tax increases.

The influential head of the German Employers’ Federation, Dieter Hundt, warned the government it needed to urgently focus on a faltering economy.

“Every tax increase is poison for the economy,” declared Hundt.

“Industry is in the throes of a severe crisis,” he said in remarks at a news conference Thursday in which he joined other German business groups rejecting energy tax rises.—dpa