The extension of taxation to nicotine-free electronic cigarettes is due “to the exponential growth in consumption of these products in Portugal”, which constitutes, “on the one hand, a gateway for new consumers to adopt smoking habits and, on the other hand, a risk to public health from the lack of control over these products”.

The state budget proposal also provides for the taxation of cigarettes, regardless of their price, based on their harm to public health, with an increase in taxation, especially on cheaper products, constituting a barrier to the entry of new consumers is another of the Government action axes.

The alignment of the minimum level of taxation on cigarettes in Portugal with the European average, providing for a mechanism for automatically updating the tax on tobacco, and the harmonization of taxation on other tobacco products or equivalent (cigarillos, rolling/fine-cut tobacco, heated tobacco, electronic cigarettes with nicotine) and the taxation of cigarettes are other measures taken by the Government to discourage consumption.

“Revenue from tobacco tax (IT) is also expected to grow by 176.6 million euros and from IABA [Tax on Alcohol and Alcoholic Beverages] by 39.6 million euros, explained by the combination between growth in private consumption and domestic demand next year and the update of proposed tax rates”, reads the document.