Cigarette Taxes – The AAMS Against Everybody

Rather than complying and removing it, conforming to other European countries, the AAMS presented an appeal to the Council of State against the decision of the TAR of Lazio that had canceled the “minimum tax.”

According to the AAMS (the Italian Autonomous Administration of the State Monopolies), the “minimum tax” must not be eliminated, even though on last February 28th the European Commission started up infringement proceedings against the Italian Republic for having this discriminatory application of the minimum excise, and even though the tax was canceled on April 5th by the TAR—the Regional Administrative Court of Lazio—because it circumvented the judgment of the European Court of Justice which had abolished the minimum price, and even though a document was presented in the Senate on May 9th stating that this tax is contrary to European directives (2011/64/UE).

Rather than complying and removing it, conforming to other European countries, the AAMS presented an appeal to the Consiglio di Stato (Council of State) against the decision of the TAR of Lazio that had canceled the “minimum tax.” The hearing will be held on this coming July 3rd.

The Rout of the Amateur Lobbyists

The AAMS’s appeal bases its argument on a highly original interpretation of the word “minimum.” According to the Italian dictionary, this term implies the smallest amount applied to the category of the reference product, in this case cigarettes; according to the AAMS, it does not. The AAMS maintains that there must be a minimum excise for some cigarettes and a 15% higher excise for others, although they are sold at a lower price.

Luciana Sbarbati

Luciana Sbarbati

For the goodly number of senators who underwrote the interpellation of Senator Luciana Sbarbati, among which Gaetano Quagliariello, Mario Baldassarri, Lamberto Dini and Franco Marini, “the application of this calculation of excise duties engenders an unjustifiable protectionism for cigarette brands sold at higher price ranges and would therefore have a serious impact on competitive dynamics” and “a selective application of a higher minimum excise only on products sold at lower prices would wipe out the competitive advantage of the more efficient manufacturers and significantly distort competitive dynamics favoring the large tobacco multinationals at the expense of the small producers.”

Specifically, the interpellation points out that “on the Italian market, the multinationals (PM, BAT and JTI) hold more than 90% of the market and it is they who would benefit from this regulation.” Such a discriminatory application of the minimum excise “clearly favors the oligopoly of tobacco multinationals in Italy.”

This oligopoly, which has always been publicly denounced by Yesmoke, has allowed the tobacco giants to earn higher profits in Italy than in all the other European Community countries, at the expense of the State’s tax income. According to the lawyer Ferrara, commenting on Yesmoke’s allegations, “the claims suggesting an alleged cartel coordinated by the AAMS appear totally unwarranted; the claims will be evaluated, where appropriate, to determine whether the conditions exist to undertake legal action in order to safeguard the honorability of the Administration.”

Cigarette taxes: Disinformation – AAMS

It has been two months since the sentence of the TAR of Lazio, and the AAMS has still not updated the apportionment table for cigarette prices as established by the TAR’s sentence. This table is the reference document for the sector operators and the failure to update it is causing confusion. The AAMS seems confident that it can “fix” everything shortly with a favorable decision of the Consiglio di Stato, technically impossible, that will restore the minimum tax.

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