The introduction of a new tax on vaping devices has aroused controversy. Although the legislator’s intention is to restrict the availability of nicotine products, the project of UD139 (parliamentary print 981) may have the reverse effect to the intended one. Increasing taxation of e-cigarettes will make traditional cigarettes the cheapest option for consumers.
Fiscal policy a fight against addiction
The excise tax on nicotine products usually has a purpose to restrict their consumption. An example of effective policy in this area is Sweden, which thanks to appropriate regulations has reduced the percentage of smokers to 5%.
In Poland however this may have the reverse effect. Another project to amend the law on excise tax assumes an increase of excise on fluids for e-cigarettes, but also new charges on the devices for vaporization. Additionally, single electronic cigarettes are to be subject to a higher tax rate, because of the content of nicotine liquids.
Such
resolution may have unexpected effects, making traditional cigarettes become a much cheaper alternative to e-cigarettes.
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Legal and economic
Doubts about the new law have been expressed by the Center for Effects Regulation (COSR) University of Warsaw, which reviewed the project under its conformity with Poland constitutional law and European Union law.
As read in article on tvp.info, experts stress, that the proposed solutions may violate the principle of proportionality and the EU standard for equal treatment of products with similar effects. What more, according to COSR, the changes may not achieve the intended goal of reducing the number of young users e-cigarettes, if they are not related to proportional price increases.traditional products tobacco.
New laws and the consequences
According to the proposed law, after the entry into new regulations, the prices of nicotine products may shape as follows:
- Traditional cigarettes: 20-25 £
- One-time e-cigarettes: 80 £
- Multiple-disposable e-cigarettes: 120 £
- Refills to e-cigarettes: 60 zł
Experts indicate, that the lack of a corresponding increase in the price
of traditional cigarettes in comparison to alternative products may lead to increase their consumption. Additionally, they point out the lack
of analysis on the impact of new regulation on the grey zone and the potential development of
illegal trafficking of tobacco products.
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Inconsistencies in regulations
The Ministry of Finance initially declared, that the new regulations are to eliminate single e-cigarettes, but their price will still be competitive against more expensive multiple devices. Initially there was no plan to also tax replacement cartridges, however the modified version of the law introduced an additional tax in the amount of 40 £.
In the opinion of experts COSR, the draft law contains significant deficiencies, which prevent a full assessment of its economic and social implications. Missing is a lack of, among other things. alternative scenarios and projections on the impact of regulation on the market and consumers.
“The project requires development and vacatio legis”
According to Szymon Parulski, advisor tax, the tax structure
introduced by the law UD139 may lead to unintended consequences.
– Prohibitive taxation of one-time
electronic cigarettes and devices will cause this industry to move into the grey zone.
In effect there will not be realized the fiscal goal, and also health. The consequence of these changes may also be a increase in demand for traditional tobacco products such as cigarettes or smoking tobacco – indicates Parulski.
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His opinion that the draft law needs refinement both under legislative, as and timing.
– Before all the project should be thoroughly developed underlegislativeandshouldintroducetruevacatiolegis,that is.minimum6monthsfromthedayofenactment.Fromthefactualside,thereisnosocial justification,totaxmultiplegasdevicesanddevicesforheating.Theseregulationsshouldberestrictedonlytotaxone-timeelectroniccigarettes-addsexpert.
Accordingtorepresentativesof thevaping industry,thecurrentformofthelawmayleadtomarginalizationofthelegaldevicestovaporizationandliquidationofmanyenterprisesinvolvingtheproductionandsale.
