Cigarettes are the Vatican’s second highest source of revenue.
Pope Francis, on Thursday, announced the Vatican is banning the sale of cigarettes in its duty-free shops and supermarkets from next year. The move puts an end to the European city state’s second highest source of yearly revenue, which is estimated at 10 million euros or $11 million.
In a statement, the spokesperson of the Vatican, Greg Burke explained that the decision was made because even though it brought about a huge annual profit, “the Holy See cannot contribute to an activity that clearly damages the health of people.” He further added that “no profit can be legitimate if it puts lives at risk,” referencing to the figures by World Health Organization, which revealed 7 million people die every year because of smoking.
The Vatican has been selling cigarettes through duty-free shops and supermarkets at discounted prices to its employers, pensioners, and residents as part of their tax-free policy.
According to Avarice, a book released in 2015, and based on leaked Vatican documents, cardinals were allowed discounts on a maximum of 200 packs of cigarettes a month, while other employees were permitted to purchase not more than 50 packs of cigarettes every month. The book also revealed despite the huge amount of revenue the sales of cigarettes brought in, it was also proof that tax-free commercial policies of the Vatican were abused.
As neighboring country Italy has a high 22 percent VAT sales tax, many people there often buy cigarettes through friends and acquaintances in the Vatican. This is not the surprising part though. What “Avarice” meant when it claimed the Vatican’s tax-free commercial activities were abused is in relation to the coveted “commercial card” provided by the Vatican to its employees and residents.
With relatively high taxes in Italy, anyone who can get a hold of these “commercial cards” does so in order to claim its benefits of tax-free shopping. Any cardholder can buy most anything in the Vatican without having to pay taxes. According to a report by Ernst & Young in 2013, these “commercial cards” should not be more than a few thousand, considering the Vatican has about 5,000 employees. Yet, figures reveal as much as 41,000 commercial cards were actively used.
Although the Vatican has banned smoking in enclosed spaces back in 2002, it was never really followed. But with the ban on cigarettes itself, the city-state is sure to be not only tax-free but smoke-free too. And for the record, Pope Francis does not smoke, but many of his advisers do.