Tuesday 14 May 2013

We're Losing Revenue! Quick, Let's Tax E-Cigs!

Could this be what it's really all about?

Italian MEP Giancarlo Scottà tabled this extraordinary written question a couple of weeks ago.
I wish to put a question to the Council regarding an issue which has recently been attracting a great deal of interest, but which has never been addressed from the point of view set out below. 
I am referring to ‘electronic cigarettes’, devices considered to be ‘nicotine-containing products’ which therefore fall within Article 18 of the proposal for a directive of the European Parliament and of the Council on the approximation of the laws, regulations and administrative provisions of the Member States concerning the manufacture, presentation and sale of tobacco and related products (COM(2012)0788 — 2012/0366 (COD)).
The consumption of traditional cigarettes provides the Member States with sizeable revenues, as a result of the substantial taxes to which they are subject. 
According to a recent report by ANSA (Italian news agency) of 21 April 2013, in the first two months of 2013 alone, Italy’s coffers registered a loss of EUR 132 million, corresponding to a fall in revenue from duty on tobacco of approximately 7.6%. Of course, this shortfall cannot be completely blamed on the increasing use of electronic cigarettes, but it is certainly partly responsible. 
In light of the above, can the Council state what action it intends to take to address the differences in tax revenue materialising in State coffers following the proliferation of electronic cigarettes, which currently appear to be free from any form of duty?
Now, just pause for a moment and digest that.

He seems very upset that Italians are stopping smoking at such a rate that it is depriving his government of moolah. This, from someone in a profession of which approximately 100% claim that they would be delighted if everyone in the world quit smoking immediately.

What a surprise, then, that he is hinting at taxes being applied to e-cigs for the sole reason that they are stopping people from smoking and, therefore, reducing Italian government receipts.

Looks very much like that is the gist of it, eh?

Now, it's easy to condemn Scottà for his absurdly hypocritical concern but you can bet your house that more politically astute MEPs have had this very same thought bouncing around their heads ever since the e-cig revolution burst on the scene and disturbed their comfy status quo.

It dovetails nicely into the fears of the tobacco control industry too, doesn't it? You see, they're desperately constructing a damage limitation exercise while e-cigs continue to soar in popularity and show up their movement as being laughably ineffective, wedded to corporate pharma interests and - the best bit - not as interested in health as their prior emotional string-pulling has led the world to believe.

We seem, then, to be witnessing an unholy alliance of grasping state representatives weeping as their budgets decline, while simultaneously an unwanted guest - in the form of e-cigs - breezes in and smashes the sound system at tobacco control's carefully crafted mood music party.

Legislators want the money, obsessive anti-smokers want the decades-long ego-stroking to continue (as well as the cash it affords them too, natch). And they all hate e-cigs for fucking it up.

It would neatly explain why Linda McAvan - the most dangerous European alive today - and her junk scientist chums are endorsing utter garbage as fact during internet televised kangaroo 'workshops.  We've seen the same behaviour before, and I've written about it, but never has it been displayed so honestly in the public domain.

It also proves that - at the highest level - the ability of e-cigs to aid smoking cessation is accepted no matter how much tobacco control circle their wagons and try to deny it.

If it was truly about health, furrow-browed politicians who harangue us relentlessly to abandon tobacco - and the lucrative industry which has profited by producing ever more imaginative but ineffectual wheezes to bully smokers into submission - would be welcoming the advent of the e-cig and allowing them to be advertised as smoking cessation devices.

Like I said, that would be if it were truly about health which, of course, it has never been.

Nice of Signor Scottà to admit it.

H/T Rursus via e-mail


Jeff Wood said...

Just for info, a lot of Italians smoke. Everyone is pretty relaxed about it. The EU-inspired rules on smoking in "public" places apply, but are not enforced fanatically as in the UK.

(There is a bar I know in Calabria where the ashtrays are on the tables indoors, and are used, and you can cadge a light from the barman. Mind you, the place is owned by the local Capo. the sentries around the bar keep their sawn-offs under their coats, mostly. I wish ASH would call by for a mineral water.)

Anyway, vaping is suddenly popular, and three shops selling the necessary opened in our local big town in as many months. It is noticeable that elegant women see vaping as an elegant alternative to tobacco.

Last week I saw a chap stroll through the shopping mall casually vaping. No-one, including the two security guards he passed, turned a hair.

We are getting a bit pissed off with the EU (oddly, not with the Euro, but in some respects we are not quite sane). If they try to levy duty on E-liquids I suspect there will be blowback.

J Johnson said...

Thought you'd like to see what your writing inspired.


Junican said...

Sort of 'off topic' but not really.

I noticed quite a lot of 'referrals' from here to the Bolton Smokers Club which occurred yesterday. Somewhat puzzled, I (the administrator of the BSC site) checked your site and found that the BSC now appears in your blogroll. We (as in 'royal WE') thank you for the inclusion!

Back to topic, I received an email via Disqus from yourself which provided the recording of the EU workshop meeting on ecig regulation. I had looked around fro such a recording but could not find it. Our thanks are due to Vaping World for having the foresight to make the recording.

Oddly enough, before coming here tonight, I decided to write a post at the BSC about that meeting, including the URL to the video. As best I could, I produced a time log of various interesting statements and comments which were made in the meeting. The log is by no means exhaustive, but I think that it might help people who do not have the time to watch the whole three hour video. Persons can see my efforts here:


It is interesting to observe that, throughout the meeting, not one person mentioned the loss of revenue to States! We should be in no doubt that the Zealots are well aware of this matter and that it is part of their reasoning regarding the licencing of these soon-to-be 'medicines'.

Jean Granville said...

Why don't they ask the government to tax Nicorette too? Or at least stop subsidizing them?

Mark Wadsworth said...

Good summary.

Crossbow said...

Honesty in politics? Surely not!

Frank J said...

Honesty, yes but a bit thick. I do not see the point of hoping for tax revenue if you're, effectively. 'banning' them by making them next to bloody useless in any attempt to please Pharma. Another point is that this country being dab hands at gold plating EU recommendations over the past 20 or so years would, no doubt, dive on any such recommendation. (show we're 'good' Europeans) Even if (when?) the EU collapsed we'd still pretend it hadn't.

woodsy42 said...

I think this is inevitable. If they don't ban them they will tax them, probably on the basis of nicotine content and at a rate that makes them just a bit cheaper than real ciggies. It would be hard to imagine them missing such an opportunity to slap duty on a 'pleasure' product.

V Hale said...

"devices considered to be ‘nicotine-containing products’" - When's the sin tax on tomatoes coming then? They're nicotine containing devices. Oh and the "i" newspaper the other day had a report saying that nicotine "in vegetables" staves off dementia. Why would the nicotine in one product magically have wondeful qualities that it doesn't possess in say, e-cigs...?

JonathanBagley said...

I don't think a tax is feasible. 100ml of 5.4% mixing liquid lasts me 8 weeks. That works out at less than £3 a week. I used to pay £22 a week for Belgian tobacco. The UK price would have been £40. The main difference between liquid and tobacco is volume and ease of disguise. One small container of elquid lasts months and it can be easily disguised as some other liquid. If a tax on elquid brought it up to anything like the cost of smoking, there would be a massive black market

Tatty said...

" One small container of elquid lasts months"

Really ? 30ml of premixed 16mg e-liquid lasts me roughly a week. I used to smoke between 20 and 30 ciggies a day.

My UK site is now "all-of-a-sudden" registered for VAT @ 20% taking
the price from £7.99 for 30ml up to £9.58. I didn't notice until I actually looked at the invoice after paying. That's a hell of a hike.

If they weren't registered for VAT before they should have been...or perhaps they were and this is a plausible but quick and dirty excuse to put prices up... but it just shows that The Game has
already begun to change.

I've quickly and easily found another and far cheaper vendor that will be getting my business in future. Fortunately, the world market in e-liquid is still fairly fluid*

*pun intended

Jens Mellin said...

The government of italia wants to tax ecigs to organize economy measures. It looks like it is to be adopted until end of this week.


Junican said...

I believe that businesses do not have to register for VAT if their turnover is less than a certain amount. Your former vendor may have exceeded that figure.

JayR1945 said...

In the US, in 1997 RWJF seeded ($38m) the Turning Point public health, social marketing program
to make "Public Health" the driving influence in public laws to regulate behavior.

Through the MSA, all 52 states have an incentive to keep the Free Money flowing to continue this effort. If the MSA were to go away, there would be less money for:
1. biased research studies that show the horrors of tobacco, alcohol, obesity, gambling and guns.
2. jobs for people to educate the public and influence public laws.
3. other porky projects

So, this is a job enhancement effort for people who like to control behaviors that are different. But to keep the Free Money flowing, the traditional tobacco companies need to sell tobacco. And alternatives such as e-cigs and snus threatens the MSA money.

JonathanBagley said...

Tatty, I'm talking about concentrated mixing liquid. 5.4% has to be diluted down with PG, in my case to 2.4%. 100ml of 5.4% will make over 200ml of 2.4% - ten 20ml bottles of 24mg - which would last you
(20/30)x(24/16)x10=10 weeks.
Mixing liquid is also sold at 7.2%. For me, a year's supply would be 487.5ml, which would fit in one drink bottle. Contrast that with 120x50gms of Golden Virginia. Which is easier to smuggle?

Tatty said...

Junican - I hadn't thought of that, thanks. The irony being that their popularity will lose them business :S

JonathonBaguley - Ah I understand what you mean now. Thanks for clarifying and yes, I take your point. Things could get rather ridiculous with nicotine sniffer dogs at every port and airport *grin*.

I can't see that they're going to be able to tax the stuff either... to an equivalent rate of ciggies... without having to be brutally honest that they're doing it for the money.

Dick_Puddlecote said...

Excellent find, Jens!

Dick_Puddlecote said...

My you've taken to it very seriously! :)

Dick_Puddlecote said...

They are definitely starting to wrap themselves in knots, aren't they? Start with a lie and this is where it inevitably ends up. ;)

woodsy42 said...

I wasn't suggesting it had to make any logical sense whatsoever - only that tax authorities are too greedy to ignore the opportunity of a new product to tax.

Also that I thought their excuse would be to tax the nicotine content because they would call it a pleasure drug and they would add a 'duty' like alcohol. If they ever get around to legalising pot I expect them to do the same - because that's what governments do, and then they expect us to be grateful because we are allowed to have these substances!

As for other incidental sources of nicotine so what? Bread has alcohol in it, so does traditional ginger beer, but they aren't taxed as such.

woodsy42 said...

But if they are not registered for vat they can't claim back vat on their purchases. So surely the registration should only increase the price by the vat on the other items like postage, packing and their profit.

Switchtoecig said...

"Legislators want the money, obsessive anti-smokers want the decades-long
ego-stroking to continue (as well as the cash it affords them too,
natch). And they all hate e-cigs for fucking it up."

Exactly. E-cig has pissed of a lot of parasites.

Optima Cigs said...

Government can only raise taxes to increase the revenue, they only think about money, they don't care how such policies will effect our lives.

South Beach Smoke said...

This is the easiest way to gather funds, just raise tax on things which are getting popular and watch the money pouring in.

Eddy - Optimacigs.com said...

Legal issues concerning the flavor of electronic cigarettes have always been changing and uncertain. This is because there are many parties involved. Each of these parties has enormous power in the industry and in a region and makes this problems are getting worse. Eddy - Optimacigs.com

tch said...

Great article

Draylynn said...

All countries are looking at taxing them now, it's ridiculous! They're not technically tobacco related products either, as they don't contain tobacco.
Every excuse out the book is coming out now and it's rather pathetic the lengths the government will go to and how sly the media keeps blaring out these completely fictional news posts to try and find a reason to slap a big fat tax on them.
A lot of stress on smokers to stop in the UK, so the NHS doesn't have as many smoking related bills, then someone invents these vaporizing thingies (which are brilliant, 24 hours on it, that's all it takes to chuck your tobacco away). I actually read an article the other day that e-cigs COST the NHS thousands of pounds, I'm still quite confused how since they aren't licensed for the NHS and no one goes to hospital over them. o_o

Cheap E Cigarette in UK said...

If you loss revenue than tax on real cigarette because it affect o health very dangerously than e cig so let the people make smoke an e cigarette other than the tobacco cigarette.

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