Bhutan Revises Tax Rates for Tobacco & Vape Products

Revised Structure Replaces Sales Tax with Specific Excise Duties on Cigarettes, E-Cigarettes, and Devices
The government of Bhutan has announced a significant revision to its taxation framework for tobacco and vaping products, which is set to take effect early next year. The new structure replaces the existing sales tax system with a combination of customs duties, goods and services tax (GST), and specific excise taxes.

Under the new rules, the current 100% sales tax on cigarettes will be eliminated. Instead, these products will be subject to a 10% customs duty, a 5% GST, and a specific excise tax of Nu 10 per cigarette stick and Nu 40 per cigar stick.

E-cigarettes and related products will also see substantial changes. The existing 110% tax on e-cigarettes, vapes, and their refills will be replaced by a 100% excise tax, in addition to a 10% customs duty and 5% GST. Standalone e-cigarette devices, previously taxed at a combined 15%, will now be subject to a 10% excise tax, a 10% customs duty, and a 5% GST.

For other tobacco products like chewing tobacco, the current 110% tax will be replaced by a 10% customs duty, 5% GST, and an excise tax of Nu 1,500 per kilogram. These changes represent a comprehensive overhaul of how tobacco and nicotine products are taxed in Bhutan.

• News source: Bhutanese government revises taxes on alcohol and tobacco to curb non-communicable diseases

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Matthew Ma

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With over a decade of experience in the e-cigarette industry, Matthew Ma is a seasoned expert in both the manufacturing and usage aspects of vaping products. His extensive background has provided him with a deep understanding of the intricacies and evolving dynamics of e-cigarettes.

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