Italy’s minimum price of cigarettes has been abolished, as the sentence of the European Court of Justice ordered. But the Italian State Monopolies Agency has refused to give Yesmoke, that has made the request, authorization to lower its prices.
“On this question,—the AAMS points out—article 39quater, parag. 2 of legislative decree 26 October 1995, no. 504, and subsequent amendments and integrations states that requests of this nature must be accompanied, in relation to the sales volumes of each product, by a report representing the economic and financial consequences of the proposed variation.”
A Brilliant Idea
To abide by the European Court’s “minimum price” sentence, the Italian Government has invented a “minimum tax,” a levy that would be paid only by those producers who sell their tobacco products below the limits of the old minimum price.
But this tax decree was studied so that any manufacturer who wants take advantage of the abolition of the minimum price has to sell his products below cost.
And in case anyone decided to sell below cost, here comes article 39quater, parag. 2 of legislative decree 26 October 1995, no. 504, that forbids the sale of tobacco products below cost. Everything is perfectly protected!
Typical Italian Creativity
According to the European Union, the minimum price had to be eliminated because it protected the profits of the manufacturers sacrificing potential revenue for the State. The EU’s objective was to increase the State’s income by raising cigarette prices through taxation.
However, in Italy, some people did not want to raise the taxes; their friends, the foreign tobacco giants, would not appreciate this. But at the same time, they could not allow the prices to go down due to the abolition of the minimum price.
So, with typical Italian creativity, they invented the “minimum tax.”
Yesmoke has faced years of lawsuits and legal expenses, the company has fought, devoted itself to the cause and it won the battle. And today four slobs in Rome have succeeded, for the moment, in wiping out everything.
And we remember that newspapers described the new decree as: “The sting on shredded tobacco and low-cost cigarettes.” Officially, the new tax was to contribute to aid the earthquake victims: “Thanks to the sting, more resources for the Abruzzo…”
But from cigarettes, which make up 98.5% of the tobacco market, we can be mathematically certain that not a single tax cent will be collected.
Yesmoke would like to make its contribution to the Abruzzo population; the company has requested permission to lower its prices and it is prepared to pay the “minimum tax.” But it has found its way blocked by article 39 quarter, parag. 2, no. 504…
What we are seeing is grotesque: things like this can happen only in Italy; they would be unimaginable in any other evolved country.
And how about those poor bastards who do pay taxes, what do they think?