Italy is adjusting its e-cigarette tax for the fourth time in four years, a change that will benefit e-cigarette consumers. It is reported that the new tax rate in Italy will take effect on April 1, and the Senate finally passed the bill at the end of February.
At present, Italy has cancelled the plan to increase the tax on e-liquids that was supposed to take effect in January 2022. The tax on nicotine-containing e-liquids will drop from €0.175 (equivalent to $0.19) to €0.13 per milliliter, and the tax on nicotine-free e-liquids will drop from €0.13 to €0.08 per milliliter.
In fact, Italy’s e-cigarette tax rate has always been uncertain, with parliament changing the tax rate arbitrarily in almost every new annual budget. Political leaders don’t seem to sympathize with small businesses trying to plan for the future, nor with consumers who just want appealing products to help them avoid smoking.
At current rates, a 10ml bottle of e-liquid (the legal maximum capacity in EU countries) starts at 5 euros and ends up selling for more than 8 euros.
E-cigarette prices in Italy have been on a roller coaster since 2014. At the time, Italy’s parliament passed a tax that wiped out 75 percent of the country’s booming legal vaping industry, making vaping as expensive as smoking. The €0.40/ml tax introduced in 2014 – the highest in the EU – has nearly doubled the price of e-liquids, forcing many e-cigarette makers to source products from black market or illegal cross-border sellers. Of course, some people started smoking cigarettes again.
Parliament has also banned online sales within Italy. In less than three years, the once mighty Italian vaping industry has shrunk from 4,000 businesses (with Italy’s total population of about 61 million) to just 1,000.
Finally, in 2019, pressure from e-cigarette makers and the surviving e-cigarette industry convinced lawmakers to right their wrongs by reducing the tax rate by 80%, to €0.08 per milliliter for nicotine-containing e-liquids, The tax rate for nicotine-free e-liquids has dropped to €0.04 per milliliter, which is much more reasonable.
But last year, politicians raised the tax rate again, with automatic increases in 2022 and 2023, eventually raising the tax on nicotine-containing e-liquids to around €0.21 per milliliter and nicotine-free e-liquids to around 0.21 per milliliter. Around 0.17 euros. (Parliament then temporarily lowered the tax rate to 2019 levels due to Covid-19, but the relief expires at the end of 2021.)
In addition to the e-cigarette tax, consumers also pay a 22% sales tax, the value-added tax on all e-cigarette products (and most other products). At current rates, a 10ml bottle of e-liquid (the legal maximum capacity in EU countries) starts at 5 euros and ends up selling for more than 8 euros. Nearly 40% of consumer purchase costs are taxes.
