Tag: VdeH

  • Germany Passes Bill to Raise Vapor, HnB Taxes

    Germany Passes Bill to Raise Vapor, HnB Taxes

    Vapers and cigarette smokers alike will be paying more for those products after the German Bundestag signed off on a bill to raise taxes on combustible cigarettes, e-cigarettes and heat-not-burn (HnB) tobacco products.

    Credit: Craig

    On Friday morning, the Bundestag waved through legislation to make vaping in Germany more expensive as of next year. Legislators are coming down hard on e-cigarettes HnB products which were previously only lightly taxed. That will change in the future, as the government moves to tax even nicotine-free varieties of e-cigarettes.

    Currently, a 10-millilitre bottle of vape liquid costs around 5 euros in Germany. In 2022, an extra 1.60 euros will be added to this price in taxation, and this will rise to 3.20 euros by 2026. An additional tax is also to be introduced for HnB products so that those products will be treated similarly to cigarettes for tax purposes.

    The new law has been met with dismay by the manufacturers of vaping products who argue that their products contain significantly fewer harmful substances than tobacco cigarettes and should therefore not be subject to the same levels of taxation. The Association of the E-Cigarette Trade (VdeH) warned that the move might prompt vapers to revert to smoking tobacco cigarettes.

    The so-called “Alliance for Tobacco-Free Enjoyment” – a representative body for the e-cigarette industry – said that it intends to go to the Federal Constitutional Court to file a complaint against what it sees as a disproportionate tax increase.

    Also, the combustible tobacco tax on a packet of 20 cigarettes will rise by an average of 10 cents in 2021. A year later, a further 10 cents will be added, and in both 2025 and 2026 another 15 cents per pack will be added.

    Around one in four adults in Germany smokes regularly, meaning that the tobacco tax is a big source of revenue for the government. Last year, it swelled the government’s coffers to the tune of approximately 14.7 billion euros. The last time the tobacco tax was increased was in 2015.

  • Germany: Plans For Vapor Taxation a ‘Disaster’

    Germany: Plans For Vapor Taxation a ‘Disaster’

    Photo: Steve Buissinne from Pixabay

    Plans by Germany’s governing coalition to tax vapor products are a disaster for public health and the economy, according to the country’s e-cigarette trade association, VdeH. The move will make vapor products more expensive than combustible cigarettes, which are widely acknowledged to be considerably more harmful to health.

    Under the plans, e-liquids will attract a tax of €4 per 10 mL bottle from July 1, 2022. On Jan. 1, 2024, the tax will increase to €8 plus VAT, i.e. €9.52 per 10 mL bottle. Based on an average sales price of about €5 per bottle, this amounts to a tripling of the retail price, says VdeH.

    “These tax plans leave you stunned, and one initially suspects a calculation error,” said Michal Dobrajc, executive chairman of the VdeH, in a statement. Such a price increase, he added, could only have been passed with the intention to kill off vaping.

    While not opposing e-cigarette taxation as such, the VdeH said fiscal measures should weigh the risks of vaping against those of smoking. Based on what is known about those relative risks, the tax on vapor products should not exceed 5 percent of that on tobacco products, according to the association. The governing coalition’s plans amount to 75 percent of the tobacco tax in Germany.

    The VdeH urged the German government to heed the experience of other countries.

    A similar tax policy in Italy caused the vapor market to collapse even as tobacco sales increased. Tax collections shriveled and the black market thrived. The Italian government was eventually forced to reduce the tax burden on vapor products by 90 percent. Estonia and Hungary had comparable experiences.

    The biggest losers of the governing coalition’s plans, according to the VdeH, are former smokers who successfully quit their habit with the help of e-cigarettes and current smokers who will not attempt to switch under the new tax regime. A police union has already described the tax plans as a “startup for smugglers,” the association noted.