A committee of the Israeli Knesset (parliament) will decide soon whether to approve the huge tax on vaping products imposed last November by the government’s finance ministry. The levy is the highest vape tax in the world.
The tax is apparently already in effect, but it must be approved retroactively by the Knesset finance committee, according to Israeli researcher Zvi Herzig. The committee can also modify the order, which could mean reducing the extreme tax rate of nearly $7 (US) per milliliter on e-liquid and more than $10 per pod or disposable device.
Israeli vapers and harm reduction supporters need to act quickly to register opposition to the tax with their Knesset members. The finance committee could vote on the tax as early as next week.
The goal of the tax is parity between vaping product and cigarette prices—much like the language recently removed from the proposed Build Back Better Act in the U.S. Congress and some earlier unsuccessful bills.
The government’s tax scheme imposes 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.
A recent paper by a group of health economists, published by the National Bureau of Economic Research, showed that high taxes on vaping products lead to increased smoking by youth and adults. A tax as steep as this one will destroy Israel’s legal vaping market. If the tax remains in place, sales of vaping products in Israel will quickly shift to the black market, and many vapers will return to cigarettes.
Because of declining cigarette sales, state governments in the U.S. and countries around the world are looking to vapor products as a new source of tax revenue.
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