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January 31, 2022

Israel: Nightmare Vape Tax Finalized by Knesset

The finance committee of Israel’s Knesset (parliament) has approved a slightly modified version of the draconian tax on vaping devices and e-liquid that was imposed last November by the government’s Ministry of Finance. The new tax rates will take effect immediately.

Although the committee reduced the tax rates somewhat from the levels announced previously, Israel will still have the highest vape tax in the world. According to Israeli anti-smoking activist Zvi Herzig, the committee eliminated a separate tax on disposable products, and will apply the same tax rate to all vaping products: 270 percent of the wholesale cost, plus 8.16 Israeli New Shekels (NIS) per milliliter, with a minimum total tax on all products equivalent to 15.6 NIS/mL.

One NIS equals about 32 U.S. cents, so 15.6 NIS would be $4.93 per milliliter, or about $300 on a 60 mL bottle of vape juice. The previously imposed tax was almost $7/mL—but the new, “lower” tax will destroy the legal market just as quickly. Manufacturers will simply be unable to compete with black and gray market products.

The goal of both the finance and health ministries was to tax vaping products at the same rate as cigarettes.The health ministry, heavily influenced by anti-vaping tobacco control groups, maintains that vaping is just as dangerous as smoking. In fact, the health ministry sought an even higher tax. According to newspaper Israel Hayom, Finance Committee Chairman Alex Kushnir “reduced the conversion formula by 30% compared to what the Ministry of Health wanted.”

Letters opposing the tax were sent to the committee by American and European academics who support vaping as harm reduction, but apparently had no effect on the committee’s decision.

Feb. 2, 2022
This article has been updated to correct details of the tax rate. We originally reported that the tax is "270 percent of the wholesale cost, plus 15.6 Israeli New Shekels (NIS) per milliliter of e-liquid." But 15.6 NIS/mL is actually the minimum final tax amount per milliliter, including all components of the tax.

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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