The provincial government of Manitoba, Canada, is not going to increase taxes on electronic cigarettes even though smokers switching to these products is said to comprise the major reason why a C$1-per-carton excise increase on regular cigarettes is predicted to result in a 12 percent drop in tobacco revenue, according to a story by The Canadian Press.
The government raised tobacco excise in last week’s budget.
Barry Draward, an assistant deputy minister of finance, said the main reason for the drop was people switching from tobacco to electronic cigarettes, which attracted only eight percent provincial sales tax.
Draward said the jury was still out as to whether electronic cigarettes were an alternative form of tobacco cigarettes or stop-smoking aids, and that there could be tax implications.
“It would be a health [department] decision, regardless,” Draward said. “If they’re saying it’s a cigarette replacement, then, in my opinion, we’ve got to tax it, but we don’t know that yet.”
However, Jodee Mason, a spokeswoman for Finance Minister Greg Dewar, said the province was not going to raise taxes on electronic cigarettes.