Roll-your-own and no-burn cigarettes still taxed at lower rates

Cancer Association lashes out at Kahlon for refusing to equalize taxes on tobacco products.

cigarettes displayed at the open market (photo credit: MARC ISRAEL SELLEM/THE JERUSALEM POST)
cigarettes displayed at the open market
Finance Minister Moshe Kahlon has refused to make the tax on rolling tobacco equal to that on regular cigarettes. Even though equalizing taxes on similar products does not mean an increase in taxes, Kahlon turned down the request by Health Minister Ya’acov Litzman to do so, saying that he is “opposed to raising any taxes.”
The Finance Ministry spokesman did not comment on Sunday, beyond saying that he “opposed raising all taxes.”
In a letter to Kahlon, the health minister said that rolling tobacco is just as dangerous as ready-made cigarettes, but the price is much lower because the taxes are less. Rolling tobacco and cigarette papers now constitute 25% of all cigarette sales and the rate of increase is significant, costing the state a billion shekels in lost taxes, according to the Israel Cancer Association.
The discrepancy is largely responsible for the significant increase of smoking among Israeli adults in the past year, according to the ICA, with a concomitant rise expected in deaths from cancer, respiratory diseases and other disorders.
The higher morbidity rate will lead to significantly higher expenses for healthcare, which will come out of the Treasury’s coffers, but this was not mentioned by Kahlon.
Meanwhile, the ICA has still not received a reply from a letter it sent three weeks ago to the finance minister demanding that the taxes on all tobacco products – rolled, ready-made and non-burning tobacco cigarettes – be raised significantly. In its letter to Kahlon, it said the iQOS – the non-burning, heated tobacco product made by the Philip Morris Company, which is forbidden for sale in the US but allowed by the Health Ministry here – is “dangerous to health, as the company itself has testified. The same company misled the public by making claims, which have since proven false, that “light” cigarettes or filtered cigarettes were safer.
Kahlon has not responded, even though the ICA sent many reminders and has not be allowed a meeting with treasury professionals on tobacco taxes.
Dr. Leah Rosen, head of the health promotion department at Tel Aviv University’s School of Public Health, added that “taxation is the strongest regulatory tool available to us today. The recent increase in smoking rates in Israel – which rose from 18.7% in 2013 to 22.5% in 2016 – is unprecedented in Israel and breaks the trend throughout the developed world, where smoking rates have been steadily declining for decades.
“The increase in smoking rates translates into an additional 200,000 smokers in Israel. Because at least half of all smokers die from their habit, this means that an additional 100,000 people in this country are expected to die from smoking-related harms, in addition to the 500,000 smokers already on death row due to their smoking habit,” she said.
The finance minister, said Rosen, “has in his hands the ability to curb and reverse this tragic increase in smoking, by the simple act of raising taxes on roll-your-own tobacco. He should consider the very lives of his constituents and of all Israelis, as well as their health, their welfare, and their families – and also the enormous negative economic impact of smoking on the economy. It is the economy, after all, for which he is responsible.”
As for iQOS, said Rosen, “a marketing ban and a ban on making health claims about iQOS would be a wise policy for us to adopt as well, until such time as the FDA makes its decisions.”