Colombia Proposes New “Dual Tax” on Vapes & Nicotine Products
Colombia’s Minister of Finance, Germán Ávila, has announced that the government’s new tax reform bill will include a special chapter to impose new taxes on tobacco, vapes, and other nicotine products. The proposal, part of a broader financing law, aims to address the “negative externalities” associated with these items and is expected to be presented to Congress in the coming days.
The reform introduces a dual tax system for e-cigarettes, vapes, and other non-combustible nicotine products. The first component is a specific tax, which sets a fixed rate of $1,000 COP per milliliter of vaping liquid, regardless of whether it contains nicotine. Similarly, a rate of $1,000 COP per gram (or fraction thereof) will be applied to oral, dermal, or transdermal nicotine products, such as nicotine pouches.
In addition to this specific tax, a second *ad valorem* tax is proposed, which would be applied as a percentage of the final retail price of these products. This dual system is designed to significantly increase the tax burden on these items, aiming to boost government revenue and, according to the Finance Minister, create a positive impact on public health by potentially discouraging use.
This move is part of a comprehensive review of the country’s fiscal expenditures, which also includes potential adjustments to VAT and increases in the progressivity of income and wealth taxes. While some taxes on liquor and tobacco already exist, this new framework specifically targets the rapidly growing vape and alternative nicotine market with a more aggressive taxation strategy.
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