Italy’s E-Liquid Tax Already Proving a Help to Tobacco Companies and Deadly to Vaping

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tricoloreItaly was one of the first countries to institute a tax aimed at electronic cigarettes and vapor products — focused primarily on e-liquids. The tax went into effect in January of this year and roughly doubles the price of e-liquids and e-cig refills there.

The initial proposed tax would have tripled the cost of these items, but even the threat of that seems to have devastated the industry there. While some half a million individuals were vapers in 2013, now the figure rests around half that. Presumably, thousands of electronic cigarette and vapor products shops have been forced to close — though that sounds like a bubble bursting if I’ve ever heard of one.  However, many businesses did say that the proposed tax was the reason they chose to go ahead and shutter.

While political officials claim the tax is designed to discourage use of a toxic product, one can’t help but think that declines in state tobacco revenues might be connected.  Italy has lost more than a half billion euros (560 million in USD) in tax revenues each year since 2013 because of tobacco declines. At the same time, officials claim they’re being fair to e-cigs by taxing them at half the rate of tobacco because of their lower harm. If the tax comparison was at all based on harm, vaping would be taxed at a rate 99% less than that of smoking. It’s also hard to take that claim to heart when the initially proposed tax would not only have tripled the cost of e-cigs and vapor products, but also would have applied to all peripheral items such as mods, batteries, and chargers. Courts blocked the initial plan as too confusing.

ItalyYou can read more about the tax right here.

What’s not surprising is the hand tobacco company’s are playing in the landscape there. How could the government ignore, say, Philip Morris when 7.5 billion of the state’s 12 billion in tobacco tax revenues come from that company alone. Tobacco companies seem to be pushing non-smoking tobacco products in the country explicitly to attempt to buy good will claiming that they too are changing with the times for those that wish it. At the same time, I’m certain that the existence of a larger grey area of tobacco products makes it more likely that e-cigs will get swept up in broad sweeping regulations that prefer not to have to differentiate.

It’s really too bad that a country which produced one of the most significant researchers of electronic cigarettes and vaping products, Riccardo Polosa at the University of Catania, is have such trouble treating the industry fairly. Clearly, fear mongering is winning out over actual research.  But hey, a terrible tax is better than the proposed total ban of electronic cigarettes Italy started with in 2009. But that tax and efforts to fight the industry on the whole still send a message to the public that e-cigs are not to be trifled with and seems to be sending many vapers back to smoking.

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