Smotrich finally agrees to equal taxation on e-cigs and regular cigarettes

Following the demand of the Knesset Finance Committee, a representative of Finance Minister Bezalel Smotrich told the committee on Thursday that he no longer is opposed to equalizing taxation on electronic cigarettes (e-cigs) with that on regular cigarettes. The finance minister stated that the minister is not opposed to comparing the taxation on electronic cigarettes to the taxation on regular cigarettes. 

Public health organizations and leading physicians have charged that the Finance Ministry has been giving in to the pressure of the tobacco companies. They declared in a statement that “especially in these days of war, we must evaluate effective ways to save lives. Taxation on smoking products saves lives.” 

Those public health professionals sent a letter this week to MK Moshe Gafni, chairman of the Finance Committee, regarding the cancellation of the tax exemption for the import of various smoking products into Israel. The letter was sent ahead of the discussion of the budget proposal for 2024, which also includes the cancellation of the tax exemption on cigarettes that is currently given in duty-free shops at airports and border crossings.

The organizations emphasize that the taxation of smoking products has been studied extensively and has been proven to be the most effective measure for reducing smoking rates, including preventing the initiation of smoking among teenagers and children.

The committee debated the issue of establishing an increase in the purchase tax on unprocessed tobacco, cigarettes, processed tobacco for cigarettes, and single units of tobacco, as well as those products in stock and not yet offered for sale.

At the beginning of the discussion, the members of the committee wondered why a tax of the same amount was not imposed on electronic cigarettes, which has been opposed by the Treasury after Health Ministry officials stated that there should be such an equalization.

Concern of costs passed to the public

Finally, at the end of the proceedings, the Treasury representative said there was concern that the costs would be passed on to the public only but added that the minister is not opposed to such an addition to the order. 

“The scourge of smoking exacts a heavy toll on health and the economy and can be blamed for almost a fifth of the deaths in Israel every year. It is important to act urgently to protect the present and future generations from the destructive consequences of smoking and exposure to second-hand smoke.

A copy of the letter was sent to the health and finance ministers and their directors-general.