Colombia Proposes Major Tax Hike on Vapes & Cigarettes
Government Aims to Raise Over a Trillion Pesos Annually with New Tax Reform
The Colombian Ministry of Hacienda (Finance) has introduced a bill to Congress that proposes a significant tax increase on cigarettes and vaping products. The reform aims to achieve two primary goals: reduce the consumption of tobacco and its substitutes to improve public health, and secure fresh revenue for the national budget, with projections of raising over one trillion additional pesos (approximately USD 250 million) annually starting in 2026.
The government’s proposal, which aligns with World Health Organization (WHO) recommendations, is expected to have a dramatic impact on prices and consumption. The Ministry estimates that the new tax structure would cause the annual consumption of cigarettes to fall by 40.4% (from 409 million to 244 million packs) and vaping product consumption to decrease by 49.9% (from 134 million to 67 million milliliters). This would be achieved by increasing the final price of cigarettes by an estimated 57.7% and vapes by 57.2%.
The new tax scheme includes:
- An increase in the specific tax on a 20-unit pack of cigarettes from $4,068 to $11,200 pesos.
- A new tax of $2,000 pesos per milliliter for liquids used in vapes.
- An increase in the tax on oral nicotine from $324 to $891 pesos per gram.
- An ad valorem tax of 10% on cigarettes and a new 30% tax on electronic devices.
The Ministry noted that this reform would bring Colombia’s tobacco tax burden closer to the WHO’s recommendation that taxes should represent at least 75% of the final retail price.
The push for these changes is supported by alarming health data. The 2022 School Population Psychoactive Substance Use Study revealed that 11% of students had used e-cigarettes in the last month, compared to 4.5% for conventional cigarettes, highlighting the growing concern over youth vaping. The Ministry stated, “Vapes have become a new route of nicotine administration, generating dependence and multiple harmful effects… Children, adolescents, and young people are particularly vulnerable.”
While a similar project failed in a Senate committee on June 19th, the government is confident this new initiative will advance, arguing it could lead to one million people quitting smoking and would provide a significant boost to state finances.
- Read more: Colombia’s Vape Tax Battle: The Powerful Lobby Blocking New Laws
- News source: Cigarrillos y vapeadores podrÃan disparar su precio en Colombia: el Gobierno prepara un golpe al bolsillo con la reforma tributaria
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