Government wants to reactivate old source of income

E-Zigaretten Raucher E-cigarettes Paffen Steuern Bundesrat Tabak Tabaksteuer Gesundheit Entwöhnung Rauchen
Smokers of e-cigarettes are to be asked to pay. (Image: Lindsay Fox / pixabay)

The Swiss government is notoriously cash-strapped and desperate for revenues. Now it seems to have found a solution to a controversial tax issue.

Even small fry make a mess, the Federal Council will have thought at its meeting on Wednesday. That’s when the body approved the amendment to tobacco taxation, according to the administration.

After the emergence of e-cigarettes in China in 2004, they soon became increasingly popular in Switzerland as well. Until March 2012, e-cigarettes were considered tobacco substitutes and thus subject to a tobacco tax.

Restricted marketing

However, because many experts as well as consumers saw e-cigarettes as a means of quitting smoking, e-cigarettes were no longer considered substitute products as of April 1, 2012, and were thus exempt from tax. 

With the new Tobacco Products Act, which is expected to come into force in 2023, new regulations will also apply to e-cigarettes. For example, distribution to minors will be prohibited throughout Switzerland. In addition, restrictions on marketing will be introduced.

However, e-cigarettes are now also to be taxed again.

Consultation up in smoke

The tax should take into account the lower harmfulness potential of e-cigarettes and thus be lower than for classic tobacco cigarettes. 

With the exception of the SVP and some private individuals, the reintroduction of taxation on e-cigarettes has met with broad approval in the consultation process.

Most of the cantons and the organizations from the areas of health, sport, youth and consumption also welcome the fact that the prevention idea is included in the Tobacco Tax Act. 

However, the parties FDP, SVP, business and trade, and many individuals believe that the tax is too high and should be lowered.

Dangers for health

Lower tax rates are also indicated because consumers would otherwise switch to tax-free substances and produce their own liquids. This could pose a health risk to a large group of users, it said. In that case the costs would simply rise again in other places.

The SVP rejects the taxation of e-cigarettes – in particular: The reduced risk profile of e-cigarettes should be taken into account.

Collection is expensive

The federal government estimates this at 95 percent, but is now proposing a reduced risk profile of 77 percent, because otherwise the financial cost of collecting the tax would not be covered.

This would result in over-taxation by a factor of five, which is not the intention of the legislator. If a tax is introduced it should be set independently of the cost of collection, the SVP complained.

AHV and IV rejoice

The Federal Council expects annual additional revenues of around 13.8 million Swiss francs, which will be earmarked for the co-financing of the pension AHV and disability insurance IV.

“Yes! Why not?,” the Federal Council will have thought. On the one hand, Switzerland has already made so much effort with the consultation & Co. that now some taxes should also come into the coffers. The balance to the health protection seems also there.

And on the other hand the money is for a ‘good’ purpose, because AHV and IV always need income.


Government wants to reactivate old source of income

One thought on “Government wants to reactivate old source of income

  • June 19, 2023 at 8:24 am

    Thank you for sharing this insightful and informative blog post. I found the information you presented to be valuable and the explanations to be easy to understand.


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