Italian Parliament’s Finance Committee will begin an inquiry into the taxation of e-cigarettes and tobacco products on September 18, 2024. This investigation aims to reassess the current tax structure for both traditional tobacco and newer products, such as e-cigarettes, to ensure fair and effective taxation.
Scope of the Inquiry into Tobacco and E-Cigarette Taxation
The inquiry will focus on reviewing the taxation system for both traditional tobacco and new tobacco products, such as e-cigarettes. It will address:
- The rise of new tobacco products, including e-cigarettes and other alternatives,
- Challenges posed by illegal sales and smuggling,
- The need to establish an equitable tax policy across all nicotine products.
The Italian Finance Committee will consult with major industry stakeholders, analyzing how the growing market share of new tobacco products, which increased from 4% to 18% over the last four years, impacts the dominance of traditional tobacco.
Industry Hearings and Stakeholder Participation
The inquiry will feature testimony from key tobacco industry players, starting with three major tobacco industry associations:
- Italian Tobacco Traders Association (Uit),
- Assotabaccai,
- Italian Tobacco Federation (Fit).
Subsequent hearings will involve three e-cigarette industry associations:
- Uniecig,
- Aive,
- Anafe.
The Finance Committee intends to gather insights from all relevant stakeholders to ensure a comprehensive review of the market, addressing the need for tax fairness and illicit trade prevention.
Challenges in Taxation and Market Evolution
Italy’s inquiry comes in response to significant changes in the tobacco market and the lack of a unified European tax policy. Tax disparities between EU countries have led to cross-border purchasing and increased smuggling. The investigation will evaluate the current tax system and explore how Italy can adapt its pricing and taxation policies to better reflect the growing popularity of e-cigarettes and other new nicotine products.
Recent Developments in Italy’s Tobacco Tax Policy
Italy has made several notable changes to its taxation of tobacco and nicotine products over the years:
- 17th Legislative Session: The country introduced its first excise taxes on e-cigarette products, targeting both nicotine-containing and non-tobacco substances, including synthetic nicotine.
- 2020: Italy expanded its tax policy to include auxiliary products like cigarette filters and rolling papers.
- May 1, 2024: Italy will impose excise taxes on nicotine-free e-cigarette products, including flavorings and scents used in e-liquids.
These measures demonstrate Italy’s commitment to regulating both traditional and new tobacco products in a way that aligns with market developments and public health priorities.
Timeline for the Inquiry and Next Steps
The Finance Committee aims to complete its investigation by December 31, 2024. The results will guide Italy’s future taxation policies, helping ensure that tax regulations are effective, fair, and adaptable to a rapidly evolving market.
FAQs
Why is Italy conducting an inquiry into e-cigarette and tobacco product taxation?
The Italian Parliament’s Finance Committee is investigating the taxation of e-cigarettes and tobacco products to ensure that tax policies are fair and reflect the growing presence of new tobacco alternatives in the market. The inquiry aims to tackle issues like illegal sales, smuggling, and tax fairness.
Who will participate in the inquiry?
The inquiry will involve testimony from several key industry associations, including:
Italian Tobacco Traders Association (Uit),
Assotabaccai,
Italian Tobacco Federation (Fit),
along with Uniecig, Aive, and Anafe, representing the e-cigarette sector.
What issues will the inquiry focus on?
The inquiry will address:
The rise of new tobacco products such as e-cigarettes,
Tax changes and their impact on the market,
Problems of illegal sales and smuggling,
Ensuring tax fairness and efficient public service funding through tobacco taxes.
How has the market for new tobacco products evolved in Italy?
Over the last four years, the market share of new tobacco products in Italy has grown from 4% to 18%, challenging traditional tobacco’s dominance. This market shift has prompted the need to reassess the taxation framework for both traditional and new tobacco products.
What taxation changes are being considered for e-cigarettes and new products?
Italy has already introduced excise taxes on e-liquids, including nicotine-free products. As of May 1, 2024, additional taxes will be applied to nicotine-free e-cigarette products, such as flavorings and scents. The inquiry will consider whether further tax adjustments are needed to reflect the growing market for new tobacco products.
What is the timeline for the inquiry?
The inquiry, which begins on September 18, 2024, is expected to conclude by December 31, 2024. The results will inform future tax policies for tobacco and e-cigarette products in Italy.
