As e-cigarettes continue to gain popularity worldwide, governments are increasingly targeting them as a source of tax revenue. Tax authorities correctly recognize that money spent on e-cigarettes is money not spent on traditional tobacco products, which governments have relied on for decades as a source of income. The question of whether vape devices and e-liquids should be taxed like tobacco is hardly the point; governments see that they are driving smokers away from tobacco, and they understand that the lost revenue must be made up. Because vapes look like smoking, and because the public health community is strongly opposed to them, they make an attractive target for politicians, especially since they can justify taxation with various dubious health claims.
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The Yukon government is taking proactive steps to address the increasing prevalence of vaping and the associated health risks, particularly among youth. Last Thursday, the government tabled the Coordinated Vaping Product Taxation Agreement Act in the legislature, aimed at curbing the growing rates of vaping across the territory.
Read moreAs Virginia’s 2024 legislative session draws to a close, two bills and a new tax on vape products are expected to land on the governor’s desk. The proposed measures aim to address the growing concern over youth vaping, but not everyone is pleased with the potential changes. Read more
The UK government is debating implementing a dedicated tax on vaping products in next week’s Budget announcement. Unlike combustible cigarettes, e-cigarettes currently only pay the standard 20% VAT rate. A vaping levy could raise around £500 million annually if set at a similar level to tobacco duties, which brought in £10.4 billion last year. However, opponents argue higher taxes would stifle smoking cessation efforts. Read more
Regional Government Leads Spanish Initiative in Line with European Majority
The Government of the Canary Islands, an autonomous community in Spain, will impose a tax of 0.10 euros per milliliter on vaping products and e-cigarettes starting in 2024, according to the articulated text of the modification to the law regulating the tax on tobacco products. This measure, included in the draft budget for the Autonomous Community for the upcoming year, positions the Canary Islands as the first Spanish region to collect specific taxes on these products, until the central government is expected to do so for the rest of the autonomous regions.
Read moreThe UK government is considering implementing a new tax on vapes as part of its strategy to create a “smokefree generation” and reduce youth vaping rates. Recently published government documents indicate plans to explore a vape duty similar to those enacted in other countries. Read more
A sophisticated tax evasion scheme involving the misclassification of nicotine products has resulted in significant revenue losses for the South Korean government. Importers falsely declared natural nicotine as synthetic nicotine to exploit regulatory loopholes, according to recent customs data.
Read moreGovernments around the world impose excise taxes on products like alcohol and tobacco to reduce their demand. The South African government has recently implemented a tax on vaping products for the same reason. However, the new vaping tax has enraged vaping lobby groups and manufacturers who argue that e-cigarettes are less harmful than traditional cigarettes. They also claim that the tax will spawn an illicit industry, that people will go back to smoking traditional cigarettes, and that the tax will not dissuade the youth from starting vaping.In this article, we analyze the price increase claims and the effectiveness of the excise tax regime on vaping products. The Dr Yunus Carrim from Research Unit on the Economics of Excisable Products (REEP) conclude that the vaping tax is flawed because it is not well-targeted at reducing the consumption of vaping products among the youth.
Read moreIn a recent announcement, Governor John Bel Edwards revealed that he has signed HB 635 into law, which will result in an increase in the excise tax on nicotine vape products from 5 cents per milliliter to 15 cents. This change is set to take effect on July 1. The bill, sponsored by State Representative Paul Hollis (R-Covington), received overwhelming support with an 83-13 vote in the house and unanimous approval in the Senate.
Read moreElectronic cigarettes are set to face taxation in Switzerland following the approval of the Federal Council’s plan by the Council of States and the National Council. While the tax on e-cigarettes will not be as high as that on traditional cigarettes, it aims to generate revenue for the Federation. This article explores the details of the tax plan, its implications, and the different perspectives surrounding it.
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