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IEVA Warns Poland’s Vape Tax Proposals Will Destroy 95% of Businesses

IEVA Warns Poland’s Vape Tax Proposals Will Destroy 95% of Businesses

bystagbar
October 9, 2024

The Independent European Vape Alliance appeals to Poland over extreme excise hikes and a new device levy.

The Independent European Vape Alliance (IEVA) has formally appealed to the Polish Ministry of Finance, warning that proposed excise tax amendments under bills UD105 and UD139 will decimate the domestic vaping industry. This urgent intervention comes as Poland prepares to introduce Europe’s highest tax rates on e-liquids and devices, threatening public health and local businesses.

Representing independent manufacturers and distributors across Europe, IEVA emphasizes that its members are entirely separate from multinational tobacco conglomerates. Instead, these local businesses provide adult smokers with a significantly less harmful alternative to combustible tobacco, directly competing with traditional cigarette manufacturers.

A Direct Threat to Polish Small and Medium Enterprises

IEVA expressed deep concern over the economic approach taken by the Ministry of Finance. According to the government’s own Regulatory Impact Assessment (OSR), officials are fully aware that the proposals could force 95% of independent vaping companies to close. The OSR shockingly suggests that these local businesses should simply “rebrand” or seek alternative markets.

Furthermore, IEVA questions the fiscal logic of the bills. The Ministry of Finance projects over 400 million PLN in excise revenue during the first year, despite simultaneously predicting that over 50% of the taxed enterprises will collapse. The alliance argues that destroying the legal sector will inevitably prevent the government from achieving these ambitious revenue targets.

The Drastic Tax Hikes Explained

The proposed legislation outlines a steep, multi-year increase in excise duties on e-liquids, alongside an entirely new tax on vaping hardware. Under the current draft, the excise tax on e-liquids will rise as follows:

2025: A 75% increase, raising the rate from 0.55 PLN/ml to 0.96 PLN/ml.
2026: A 50% increase, bringing the rate to 1.44 PLN/ml.
2027: A 25% increase, culminating in a rate of 1.80 PLN/ml.

In practice, a standard 10ml bottle of e-liquid will carry an 18 PLN tax burden by 2027—a staggering 327% increase compared to current levels. Additionally, a flat 40 PLN excise tax (50 PLN including VAT) will be levied on all vaping devices, pushing retail prices up by an estimated 80 PLN. This would make Polish vaping hardware the most expensive in Europe.

Product Category	Current Excise Rate	Proposed Rate (by 2027)	Estimated Retail Impact
E-liquids (per ml)	0.55 PLN	1.80 PLN	+327% tax increase on a 10ml bottle (18 PLN tax)
Vaping Devices	0.00 PLN	40.00 PLN (50.00 PLN with VAT)	Retail prices expected to double to 80 PLN
Traditional Cigarettes	Standard Rate	Moderate Increase	Price expected to rise from 20 PLN to 25 PLN
Heated Tobacco Inserts	Standard Rate	Minimal Increase	Price expected to rise by only ~1 PLN per pack

Updated: Polish Senate Approves Steep Tax Increases on Vapes and Heated Tobacco

This tax structure creates a severe market distortion. While vape prices will skyrocket, the price of heated tobacco inserts—products dominated by major tobacco corporations—will only rise by approximately 1 PLN per pack. IEVA warns that this disproportionately penalizes independent vape businesses while protecting Big Tobacco’s market share.

Read more: Poland Proposes 40 PLN Tax on All Vaping Devices

Undermining Public Health and Harm Reduction

IEVA argues that excise policies must align with public health goals. Vaping is widely recognized as a highly effective tool for smoking cessation. Landmark studies, including those by Public Health England (now the Office for Health Improvement and Disparities), have established that e-cigarettes are 95% less harmful than combustible tobacco because they eliminate the combustion process, tar, and carbon monoxide.

Further research from the Pasteur Institute, the Royal College of Physicians, and the University of Oxford supports vaping’s role in reducing cancer risks and helping adult smokers quit. Even the European Parliament, in its reports on strengthening Europe against cancer (2022) and non-communicable diseases (2023), recognized that e-cigarettes can facilitate gradual smoking cessation.

By making vaping prohibitively expensive, the Polish government risks driving ex-smokers back to combustible cigarettes. Alternatively, consumers may turn to unregulated, dangerous products on the black market, which already accounts for an estimated 50% of the e-liquids consumed in Poland.

Read more: Study: E-Cigarettes Outperform NRTs for Smoking Cessation

Administrative Nightmares and Cash Flow Crises

Beyond the tax rates, the proposed administrative requirements present an existential threat to the liquidity of small and medium-sized enterprises. The bills introduce a strict one-year expiration date on excise stamps (banderoles) for e-liquids and devices. Managing and renewing these stamps annually is logistically and financially unfeasible for smaller distributors.

Furthermore, the cash reserves required to comply with the new device tax are immense. For example, a medium-sized distributor importing 100,000 devices per month would need to secure an additional 5 million PLN upfront to cover the device levy. With standard 90-day payment terms in the retail sector, this cash flow requirement balloons to 15 million PLN—a sum that will inevitably bankrupt local SMEs.

Conclusion and Appeal

IEVA urges the Polish Ministry of Finance to halt the rapid progression of bills UD105 and UD139 and engage in meaningful public consultation. The alliance calls for a rational fiscal framework that distinguishes between highly toxic combustible tobacco and low-risk vaping alternatives. Failing to do so will destroy thousands of legal jobs, damage public health, and hand the Polish market entirely to illicit actors and multinational tobacco companies.

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