Italy’s new tax said to hand advantage to big boys

Electronic cigarette firms in Italy have said that a new tax that doubles the price of e-liquid refills will hurt their industry while unfairly helping major tobacco companies such as Philip Morris International, according to a story by Sara Ledwith and Martinne Geller for Reuters.

The tax, which was adopted in January, is set at half the rate of that applied to traditional cigarettes.

The controversy centers on the fact that the lower rate is applied to both electronic cigarettes and to products that contain tobacco that is not burned during consumption, such as Marlboro HeatSticks, which PMI is launching in Italy.

Electronic cigarette companies say applying the discount to tobacco products is unfair and is designed to help the major tobacco companies.

The electronic cigarette companies and industry experts say also that the method of calculating the tax is too complicated and gives an unfair ‘discount’ to PMI’s products.

“It’s unjust,” said Massimiliano Mancini, president of ANAFE-Confindustria, a national trade association of electronic cigarette and e-liquid producers. “It’s clear that this legislation has been drafted for other interests than just taxing the e-cigs.”

Philip Morris would not comment on whether the new law gave it an advantage. “We have shared our views with the government via public hearings just like our competitors and others,” a spokesman told Reuters by e-mail.