Ecigs soon to be taxed?
In an entirely unpredictable turn of events, the European Commission mentions taxing vaping. Who would have seen that coming?
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by Dave Cross
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The story was sourced from The Financial Times, whose journalists have seen a document originating from the Europe. It reads: “The European Commission is considering taxing ecigarettes in the same way as their traditional cousins in a move that would drastically increase the cost of the alternative smoking product and further hinder their take up.”
The EC has instructed European tax experts to look into the “best way to achieve fiscal equal treatment” between electronic cigarettes and normal tobacco products – ignoring the health dividend from people switching to a healthier form of using nicotine.
They cite an “expert” from research specialists Nielsen as saying a third of vapers claim they switched due to cost, again ignoring the 66% who switch for health reasons. With predictions that the vaping market will be worth $51billion by 2030 it is inevitable that politicians see it as something they can get their grubby mitts on.
In an election year, it didn’t take long before Paul Nuttals of UKIP stuck his oar in. “This move unmasks the EU’s real intent of its Tobacco Directive which was to tax all cigarettes more and help governments make more money,” he said. Vapers with memories of the voting on Article 20 of the Tobacco Products Directive will recall that UKIP MEPs failed to vote in opposition to its introduction.
No other political parties responded to a request for a position statement for inclusion in this article.
ECITA, the UK vaping trade body, holds that there is no clear harm caused by electronic cigarettes, making the proposed sin tax unjustifiable according to chief scientific officer Tom Pruen.
Clive Bates, vaping advocate and writer of The Counterfactual, said: “Basic economics tells you that raising a tax on a newer, much safer, product will lead to more consumption of an older much more dangerous product.”
This in itself might indicate the thinking behind the proposed move given the declining sales of traditional (and taxed) cigarettes? That said, the taxing of vaping in Europe has a precedent following Portugal’s decision to stick a €0.60 per millilitre tax onto eliquids in October 2014. This equates to a tax of almost £4.50 on every 10ml bottle – doubling the price.
Bates uses European legislation to argue a compelling case against taxation. He poses a number of highly pertinent questions such as:
- What is the rationale for taxing tobacco at a higher level than other consumer products, and to what extent does this rationale apply to e-cigarettes and vapour products?
Clearly, if cigarettes hold a premium taxation level it is due to the negative health effects – something that cannot be supported with regards e-cigs.
The logistics of implementing a vaping tax will present problems to legislators. Metal tubes can be classified for any use and thereby circumvent a tax on equipment, which leaves cigalikes and liquids. The cigalike market is in decline due to the products not meeting consumer needs and the DIY juice market would circumvent any taxation put in place.
Would vapers be prepared to pay £10 for 10ml of liquid? Will juice manufacturers elect to start selling custard & nicotine flavoured rat poison? Watch this space.
Dave Cross
Journalist at POTVDave is a freelance writer; with articles on music, motorbikes, football, pop-science, vaping and tobacco harm reduction in Sounds, Melody Maker, UBG, AWoL, Bike, When Saturday Comes, Vape News Magazine, and syndicated across the Johnston Press group. He was published in an anthology of “Greatest Football Writing”, but still believes this was a mistake. Dave contributes sketches to comedy shows and used to co-host a radio sketch show. He’s worked with numerous start-ups to develop content for their websites.
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