Italy’s New Taxation Draft Would Raise the Price of a 10 Ml Bottle of E-Liquid to 35 Euro
According to calculations made by Anafe-Confindustria, Italy’s national association of electronic cigarette manufacturers, the Government’s new taxation proposal would raise the price of a small e-liquid bottle from 6 euro to a whopping 35 euro. That’s $47 per 10 ml. of standard e-cigarette juice. As much as I love vaping, that price is obscene, to say the least.
The new legislative decree drafted by the Italian Government aims to change the way both tobacco and electronic cigarettes are taxed. This, according to Massimiliano Mancini, president of Anafe-Confindustria, is the Government’s first mistake – they continue to treat e-cigarettes like analogs, without providing any sort of scientific proof to back their rationale. In fact, Italy is currently the only Western country in Europe to impose special taxation on electronic cigarettes.
And, as we previously reported, the consequences of this excessive taxation have been disastrous. As soon as the Ministry of Finance announced its now famous 58.5% tax increase on electronic cigarettes, last year, shops began to close, and the national market plummeted. Faced with only two choices – go bankrupt or fight back – Italian e-cigarette businesses challenged the Government’s new tax in a court of law, and managed to get it suspended as illegal, a few months ago. But the harm had already been done – businesses had begun to close, sales stagnated and investors were looking for more favorable markets to open-up shop.
Yet, even after seeing their original tax increase rejected, Government still hasn’t given up on a massive electronic cigarette tax. This time, however, they’re trying be sneaky about it. Instead of announcing it as a tax increase, they are making it look like a reduction of their original tax. What they did was reduce the excise duty of vaping goods by 40%, but only after making the price of e-liquid equivalent to that of tobacco. According to the new taxation draft, a kilogram of tobacco would have a minimum price of 170 euro (excise duty and VAT included).
Italian officials hope that their seemingly-positive tax ‘reduction’ will keep vapers from protesting, like they did when they announced the 58.5% tax increase on e-cigarettes, but Anafe-Confindustria members did the math and announced the new tax is even worse than the first one. Based on their calculations, the price of a 10 ml bottle of e-liquid would jump from the current average of 6 euro to a whopping 35 euro. That’s a 480% price increase.
Massimiliano Mancini feels that Government is choosing to ignore the peculiarities of the electronic cigarette industry and is simply treating it as an equivalent of tobacco. This, he feels, will only hurt the market more, as it leads to even more litigation, instead of solving the problem. He and other e-cigarette business owners are convinced Government only wants to destroy the independent e-cigarette business sector and clear the way for big tobacco companies. “At this point, we wonder what is the meaning of a new tax regime that ignores and even worsens the reasons why the previous one was suspended as illegal, and, moreover, is based on models lacking any scientific evidence,” Mancini concluded.
Italy’s electronic cigarette manufacturers and vendors have been looking for a compromise for months. They appealed to Government proposing a fixed tax on electronic cigarettes paid at the source, without any impact on the end user. That was quickly rejected. Then they suggested the liberalization of the market, extending even to specialized tobacco shops, but that was rejected as well. E-cigarette associations are left with the option of fighting the new legislation in court, like they did before. Sadly this will only prolong the standoff.
Sources: Repubblica.it, Gelocal.it
