China’s Ministry of Finance will impose a consumption tax on e-cigarettes sold in China from Nov. 1, according to a notice published on Tuesday.
The taxation policy will further entrench China’s once-scattered e-cigarette industry into the country’s state-backed tobacco monopoly, a major generator of tax revenue for the country, according to Reuters.
According to the Ministry of Finance, a tax rate of 36 percent will be placed on the production or import of e-cigarettes, while an 11 percent tax will be placed on the wholesale distribution of e-cigarettes.
Experts said that the annual sales revenue of domestic e-cigarette makers is about RMB20 billion ($27.36 billion), so the tax may contribute an additional RMB10 billion to the government’s annual revenue, according to The Global Times.
China has long been the world’s largest producer of e-cigarettes, though consumption lags behind that of Western countries.