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November 16, 2021

Israel Proposes World's Highest Vape Tax

Israel is planning a tax on vaping products that would be the highest in the world, and Israelis have just a few days to make a public comment on the bizarre plan.

The new tax will take effect next week, according to one online publication—although Vaping360 hasn’t been able to verify that elsewhere. According to the same article, government officials believe the tax will eliminate disposable e-cigarettes that have become popular with youth.

The tax scheme would impose a wholesale tax of 270 percent plus 11.39 Israeli New Shekels (NIS) per milliliter (with a minimum tax of NIS 21.81 per mL) on bottled e-liquid. One NIS equals 32 U.S. cents, which means the minimum tax on e-liquid would be $6.98 per mL. The minimum tax on prefilled pods or disposables would be NIS 32.72 each—equal to $10.47.

The Ministry of Finance’s draft order is posted for public comment until Nov. 21 at 9:00 a.m. So far, just 14 comments have been received.

Like the “tax parity” language currently part of the U.S. Build Back Better Act, the tax proposal in Israel is an attempt to tax vaping products at the same rate as cigarettes. The effect—making low-risk nicotine products as expensive as deadly ones—is the opposite of what rational public policy should do.

Such a tax rate on e-cigarettes is not intended to raise money for the government, but to destroy the vaping market. It seems impossible that a responsible government would not recognize that such an extreme tax would backfire and immediately create a black market.

Clarifying comments from readers in Israel are appreciated.

Smokers created vaping without any help from the tobacco industry or anti-smoking crusaders, and vapers have the right to keep innovating to help themselves. My goal is to provide clear, honest information about the challenges vaping faces from lawmakers, regulators, and brokers of disinformation. I recently joined the CASAA board, but my opinions aren’t necessarily CASAA’s, and vice versa. You can find me on Twitter @whycherrywhy
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Tzvi
Tzvi
3 days ago

Yeah, that’s pretty much what happened. First, a preparatory order was published to tax all existing stock at 1ILS(US$0.32)/ml and ~$1.5/disposable. It went into effect last sunday (11/21). The permenent order does impose the taxes detailed in the article. Said absurd tax rates show that either they were calculated by someone with next to zero knowledge of the market, or that prevention of youth vaping wasn’t the goal in the first place – While the colorful disposables available in every cornershop gained a ~$10 price hike, a single bottle of 100ml (we israelis like them chonkers) now has~$700 levied upon… Read more »

Last edited 3 days ago by Tzvi
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