BVTE warns of smuggling and health hazards from new liquid tax / Taxation of e-cigarette liquids to start on July 1

(Berlin, June 30, 2022) The German Association of the Tobacco Industry and Novel Products BVTE warns of smuggled untaxed e-cigarette liquids and new health hazards due to the taxation of liquids vaporized in e-cigarettes, which will take effect on July 1, 2022. Against the advice of many experts, the grand coalition of CDU/CSU and SPD had decided to levy tobacco tax on so-called tobacco substitutes, i.e. nicotine-containing and also nicotine-free liquids, last year shortly before the federal election.

"In the worst case, the liquid tax could lead to the creation of new black markets for organized crime," explained Jan Mücke, chief executive of BVTE, in Berlin today. "The comparatively high taxation of 16 cents per milliliter makes these risk-reduced products considerably more expensive, thus creating an incentive for consumers to obtain supplies abroad or from illegal sources not subject to food inspection and thus avoid the tax. This also creates new health risks, as liquids such as baking flavors, bath oils and vitamin preparations have no place in e-cigarettes," Mücke further warned.

The BVTE called on consumers to purchase only pharmaceutical-grade liquids that have been taxed in experienced German specialist and mail-order retailers. Untaxed e-liquids are not subject to regular product monitoring and are traded illegally in disregard of legal requirements for health or youth protection. No one knows whether pharmaceutical or technical grades have been used and whether impurities or prohibited ingredients are contained.

For the future of e-cigarettes, it is crucial that responsible manufacturers and distributors shape product development, are committed to the protection of minors, and comply with existing legal regulations. In turn, health policy should finally open up to opportunities for "Tobacco Harm Reduction," inform consumers properly, and offer incentives for less harmful products. Vaporizers should also now look after their interests, support specialist retailers and avoid irregular products despite the additional tax.

With the entry into force of the Tobacco Tax Modernization Act, e-cigarettes will also be subject to tobacco tax from July 01, 2022, initially at 16 cents per milliliter of liquid and to be increased to 32 cents per milliliter in three further stages by January 01, 2026. This tax will apply not only to commercially available liquids, but also to all liquids intended for use in e-cigarettes. Until February 2023, untaxed e-cigarette liquids that are already on the market may still be sold.