New year resolutions: countries to watch for budgets and vaping taxes in 2022

As the new year approaches, governments are presenting their budget bills for 2022, with some of them proposing a change in the tax regimes they apply to vaping products.

In Portugal, the budget bill for 2022 presented in October by minister of state for finance João Leão proposed an increase of 1% on all tobacco products, including vaping products, from €0.32/ml to €0.323/ml. But president Marcelo Rebelo de Sousa dissolved the parliament a few weeks later and announced new legislative elections in January 2022.

A potential tax increase on e-cigarettes is not expected to be discussed before April 2022 and it is not known if the rise will still be on the agenda of an incoming new minister, taking into account that the country already has one of the highest tax rates in Europe.

Italy is also looking very closely on what it will happen with the e-cigarette tax scheme in 2022. The official text of the Budget Bill 2022 recently introduced in the Senate does not contain any change to e-cigarette taxation, meaning that from January vaping taxes could increase as the temporary tax relief expires.

The approval of Decree-Law 73/2021 on Covid-related measures in the senate included a decrease in the excise duty on nicotine e-liquids until the end of 2021, from €0.13 per ml  to €0.084 per ml and from €0.086 to €0.042 per ml for nicotine-free e-liquids.

The recent appointment of Federico Freni as new Italian under-secretary for economy and finance was seen by the industry as a positive move towards possible continuation of the tax relief, but the industry is now fearing that this will not happen.

The bill tabled by the Italian minister of economy and finance, Daniele Franco, will now need to be discussed and amended in the Senate Economic and Budget Committee and it is expected to pass to the Chamber of Deputies in December. Still, a spokesperson from the Camera Dei Deputati told ECigIntelligence that no date had been confirmed yet.

 

Malaysia triples tax on nicotine-free e-liquids

 

Malaysia has recently approved the budget bill for 2022, including a tax on nicotine-containing e-liquids, and a tripling of the tax on nicotine-free e-liquids.

The tax for nicotine-containing e-liquids is set at MYR 1.20 (€0.25) per ml and the excise duties for nicotine-free e-liquids will increase from MYR 0.40 (€0.085) to MYR 1.20 (€0.25) per ml.

The Malaysian Pharmacists Society (MPS) said it considers the tax “unnecessary” and called on the government for a complete ban on e-cigarettes instead of introducing a taxation regime.

“Cigarettes including electronic cigarettes and nicotine-containing vapes are major risk contributors of non-communicable diseases (NCDs) and are a major health problem”, said MPS president Amrahi Buang.

In the Republic of Albania, the Committee on Economy and Finance approved the bill to amend Law 61/2021 on excise duties to gradually increase until 2026 the duties on nicotine-containing e-liquids.

If approved, the tax on nicotine-containing e-liquids will amount to ALL 12 (€0.01) per ml, starting on 1st January 2022.

 

What This Means: The last weeks of the year are always an interesting time to assess what governments in different countries are planning towards collecting more revenue by adjusting tax and therefore fiscal pressure on certain products.

Budgets always go through a complex legislative process, in which representatives can amend or even scrap some of the tax proposals put forward by ministers, so current proposals may be changed before they are actually applied.

– ECigIntelligence staff

Photo: Towfiqu barbhuiya

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