Germany's vaping industry association VdeH said plans by Germany's ruling coalition to tax vaping products would be a disaster for both public health and the economy. The move would make vaping products more expensive than combustible cigarettes, which are widely believed to be far more harmful to health.

According to the German ruling coalition plan, e-cigarette liquids will be taxed at 4 euros per 10 milliliters from July 1, 2022; on January 1, 2024, the tax rate will be increased to 8 euros, plus VAT, that is, every 10 9.52 euros for a ml bottle. At an average selling price of around 5 euros per bottle, this is equivalent to three times the retail price, VdeH points out.

"These tax plans leave you stunned, initially suspected of miscalculation," VdeH executive chairman Michal Dobrajc said in a statement. He added that such price increases could only be passed to eliminate e-cigarettes.

VdeH said that while it does not oppose a tax on e-cigarettes, fiscal measures should weigh the risks of e-cigarettes and smoking. Based on knowledge of these relative risks, taxes on vaping products should not exceed 5 percent of taxes on tobacco products.

The ruling coalition's plan amounts to a 75 percent tobacco tax on vaping products.

deH urged the German government to learn from the experience of other countries.

A similar tax policy in Italy led to the collapse of the vape market, i.e. tobacco sales increased and the black market flourished. The Italian government was eventually forced to cut taxes on vaping products by 90 percent. Estonia and Hungary have similar experiences.

According to VdeH, the biggest losers in the ruling coalition plan are ex-smokers who have successfully quit with the help of e-cigarettes and current smokers who won't try to switch under the new tax regime. VdeH noted that a police union has described the tax plan as a "smuggler's feast".