Taxes on Cigarettes – Agriculture Joins the Fray

“The multinationals would be willing to raise their purchase prices on tobacco, but the government must commit itself in fiscal issues tied to the excise on cigarettes, so that in a few weeks we can reach a satisfactory outcome.”

These are the words of the Councilor for Agriculture of the Umbria Region, Fernanda Cecchini, who, on last February 15th, took part in meetings in Rome called by the Ministry of Agricultural Policies (Ministero delle Politiche Agricole – MIPAF) along with the Ministries of the Economy and of Health, to discuss “agreements for the purchase of Italian tobacco.”

From Councilor Checchini’s account, the purpose of the transactions under way emerges clearly: the «aggiustamento» —fixing—of the European Court sentence that imposed the abolition of Italy’s minimum price on cigarettes. In fact, at the MIPAF meetings, there were representatives of Philip Morris, British American Tobacco and Japan Tobacco who, as reported in the newspapers, “each met separately with the exponents of the institutions.”

Since 2005, the minimum price has given away the Italian tobacco market to the three international tobacco giants, who today earn like tax collectors: Philip Morris makes a profit of 495% on a pack of Marlboros, BAT makes 380% on its MSs and Japan Tobacco takes home a healthy 415% profit on a pack of Camels. These are earnings “all’italiana”—Italian style,—that is, they would be unthinkable in other countries. And these profits are all tax-free; in fact, Big Tobacco in Italy does not even fill in a Tax Declaration….

Why should Philip Morris earn more in Italy than it does in France? And why does the Italian revenue department earn less than the French one? Why should the excise aliquot in our country be 58.5%, unchanged since 2003, while in France it has been raised to 64%? The European Union is right when it says that the minimum price “safeguards the profits of the manufacturers sacrificing the tax revenue of the State.”

Unable to Do Additions and Subtractions

The purchase of Italian tobacco by the manufacturers is an insignificant business compared to the over 2 billion euro of profits, tax free, that the three multinationals divide up every year. But no one seems to know about this.

Is it reasonable that the State forgoes fiscal revenue that could add up to close to a billion a year just because it does not increase the excises, and is satisfied with a few thousand generic euros in “contributions” from Big Tobacco?

To simplify, all the government would need to do is threaten to raise the excise aliquot from 58% to 64%, as it is in France, Big Tobacco would then accept any condition in exchange for 63%!

Or, it would be enough to say, absurdly, that if the multinationals do not buy all the Italian tobacco at twice the market price, they can expect a visit of the finance police – Guardia di Finanza. In fact, the tobacco producers do not pay a single euro of tax in Italy because all their manufacturing is done abroad… but they do have very stable organizations here.

Instead, in our country there is always someone working behind the scenes to ensure that these companies continue to make their extravagant profits and the State continues to renounce its fiscal income. How could officials give the entire Italian cigarette market away to foreign producers, asking in exchange only for a bit of charity for the farmers?

Every year the MIPAF, the Coldiretti, the Nomisma, the indomitable Renzo Patria, the “historical” lobbyist of Philip Morris with his “Filtobacco,” the FIT (Federazione Italiana Tabaccai –Italian Tobacconists Federation), and an entire galaxy of associations and foundations, in exchange for some small change, become active in congresses conferences, articles and studies in which they emphasize the role of the multinationals as benefactors of Italian agriculture, with the active participation of any politicians, ministers and undersecretaries in office, regardless of their political lineup.

Every year they talk about generic multiyear agreements, about financing research projects, scholarships and exchanges of know-how, they underline that the multinational is willing to “pay more,” without ever supplying a single numerical datum, and with great emphasis provided by all the national press.

Long Live Big Tobacco!

“From our discussions with the representatives of the tobacco multinationals, we see some positive signals for the future,” said councilor Fernanda Cecchini, in her mediation with the multinationals on behalf of the tobacco growers of Umbria.

Is Councilor Cecchini just a naive official who, during a cordial meeting let herself be sweet-talked, with their affable manners, by the representatives of those “prestigious companies” or is there something else behind it all?

What does Ms Cecchini know about the tobacco market? Does she know that the multinationals manufacture everything abroad or does she think that their factories are in Italy? Does she know that the last production plant, the one of BAT in Lecce, was closed in December and, from 2011, the company will be manufacturing all its products, including Italy’s famous “Nazionali” brand, in other countries. Is she aware that BAT, too, will no longer even fill in a tax declaration in Italy?

So great is the contempt for this “country of sheep” called Italy, that in the current appalling and ridiculous situation, Philip Morris, Japan Tobacco and BAT, total tax evaders and thieves, do not even buy their tobacco in Italy any more.

Today if the farmers protest in the piazzas, they do it because the multinationals need the Government to “adjust” the European Court sentence, with Councilor Cecchini, with her fine violet scarf like a paladin of the Constitution, who is swinging into action. And is the Government of this country of servants going to move in this direction?

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  • tilakahuja

    good on taxes on cigarettes. I think smoking is change in different way. Online tobacco products are shining like e- cigarettes. I am seeking online shop for Marlboro.

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