Chile Plans 52.6% Vape Tax Hike to Match Cigarettes
Chile’s Ministry of Finance and Ministry of Health are co-authoring a legislative proposal to drastically increase taxes on vapes and e-cigarettes. Discussed within the Senate Finance Committee as part of a broader tax reform package, the initiative seeks to raise vape taxes to an expected 52.6%.
Currently, electronic cigarettes in Chile are subject to a standard 19% tax. The government plans to equalize this with traditional tobacco packages, which face a 30% tax plus an additional charge based on the Monthly Tax Unit (UTM). Depending on the tobacco type, some traditional products face tax rates as high as 60%.
| Product Type | Current Tax Rate | Proposed Tax Rate |
|---|---|---|
| Vapes & E-Cigarettes | 19% | Up to 52.6% (aligned with tobacco) |
| Traditional Cigarettes | 30% + UTM charge | Unchanged (up to 60% for some tobacco types) |
Finance Minister Jorge Quiroz explained that the tax alignment is crucial to “prevent tobacco tax collection from shifting toward its substitutes.” Tax attorney Claudio Bustos added that while the policy has an obvious revenue-generating purpose, its ultimate goal is to discourage public consumption of harmful products.
The tax specifically targets the growing popularity of vapes among younger demographics. Dr. María Paz Corvalán, a tobacco addiction expert, warned that e-cigarettes are highly addictive and dangerous, noting that the false perception of vapes being “healthier” makes them uniquely hazardous to youth.
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