Ready go and the reform of tobacco taxation, approved in the context of the tax delegation, it immediately hits the mark. According to the Monthly Bulletin of tax revenues for the month of January 2015, the revenue from the tax on tobacco consumption it was equal to 897 million euros, recording an increase of 50 million (equal to +5,9%) compared to the same month of 2014, when it stood at 847 million. Not bad, if you think that with the Legislative Decree Tobacco, released on December 23, 2014, the Government forecasts that in the whole of 2015 an increase in revenue of 145 million euros will be generated.
A necessary intervention in a sector which constitutes an indispensable tax revenue for the State. In recent years, in fact, things were no longer going like this: in 2013 the lowering of tobacco prices had contributed to a disastrous loss of revenue for the state, of over 700 million, not filled in 2014.
Why? Basically due to the drop in cigarette prices, resulting from a downward war between producers, due to the tax system in place before the reform. The minimum tax, applied below a certain price threshold, was in fact not applied, allowing prices to fall sharply. Furthermore, 90% of tobacco taxes in Italy are proportional to the prices, only the remaining 10% is fixed on the quantities sold.
The tax structure therefore accommodated the drop in market prices. In addition to the negative effects on market dynamics, our tax structure was very far from the European average. The continental average of the specific tax is 75 euros per 1000 cigarettes, in Italy it was around 13 euros before the reform which brought it to around 17 euros, still today the lowest value of all EU countries.
These dynamics have inevitably discouraged, in recent years, the price increases historically recorded in the sector, also in order to pursue health objectives: the guarantee of high prices of access to smoking and the decrease in consumption, especially among young people.
The tobacco reform has therefore brought undeniable structural benefits: a higher minimum tax burden has been introduced for the lower price ranges and the specific fee has been slightly increased, from 13 euros to 17 euros. But alongside these interventions in a European direction, the overall taxation was increased from 58,6% to 58,7%, a measure which effectively reduces the extent of the change implemented.
However, the tobacco reform envisages that, in order to continue the process of change begun, the Government may exercise the power to further vary, in 2015 and 2016, the levels of the incidence, of the specific component and of the minimum tax burden, in the correct direction traced by the December decree. The Renzi government therefore has two years time, far from electoral deadlines, to complete a reform that began on the right foot, but which so far some experts have defined as not entirely courageous, especially when compared to the European panorama, which still sees us today among the Countries most tied to the past.
A real breaking element is however represented, perhaps not by chance, by the regulation of innovative products in the sector - electronic cigarettes and smokeless inhaled tobacco – for whom a treatment has been decided in line with the expectations of change they bring with them. Also in this case, the hope of experts and insiders is that no steps backwards will be taken.
