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Electronic Cigarettes – A Taxing Issue.

The electronic cigarette industry is full of controversy – but none more so than that surrounding its regulation and taxing. Of course, any new form of medicinal technology should hold regulations of quality and manufacturing. With more and more makers popping up across the globe, more stories of unsafe smoking devices highlight the need for some ruling here and there. However the biggest debate appears to surround the issues of financial gain – or lack thereof.

taxing-issue

The Medicines and Healthcare products Regulatory Agency  state that over the next ten years in the UK alone the e-cig will help to save millions of lives. It is by far becoming the quitting aid of choice, and praised by charities and medical professionals for its success in doing so and as a result decreasing related illnesses. We see more and more restrictions and advertising campaigns demoting tobacco cigarettes, with strict labeling and display regimes employed across the country.

So what seems to be the problem?

It has never been a secret that there are taxes on tobacco  cigarettes. It has been noted in the history books as far back as the 1600s, and has been on the steady increase ever since. But is it really the source of controversy behind the electronic cigarette? One Italy MEP seems to think so, perhaps stumbling upon the reason behind all the e-cig-kerfuffle.

 ”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

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?”

Of course, this is only one question from one MEP – but we suspect that other politicians share his concern; albeit a concern they are not likely to share publicly.

This could also suggest why EU legislators are ignoring the scientists who are campaigning for electronic cigarettes to be made readily available to all smokers as opposed to the outright ban; with Professor John Britton (Royal College of Physicians) stating the devices are set to save over 5 million lives.

The logic behind  ’sin taxes’ that are implemented on traditional cigarettes simply do not exist for the e-cigarette, therefore creating a resulting revenue issue for governments who profit out of ‘smoking’ over ‘smokers health’. The way we see it, suggesting a device that helps smokers using tobacco and chemical laden cigarettes should be banned/heavily taxed for no other reason than to line a few pockets seems like political suicide.

Surely governments wouldn’t prioritise tax revenue over saving lives?

Whilst we second the notion that tougher regulation to ensure quality and safety of products are needed in a rapidly expanding industry, with restrictions/guidelines on the ‘purity’ of nicotine used in products is a positive step forward; anything otherwise seems ludicrously laughable.

Lets hope that legislators come to their senses and listen to the likes of Professor Britton.

If not, if the majority resonate the thoughts of the MEP in Italy – millions of UK lives could be on the line.


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