Category: Taxation

  • Some EU Countries Want Vapes in With Tobacco Tax

    Some EU Countries Want Vapes in With Tobacco Tax

    Credit: Zerbor

    Sixteen EU countries asked the European Commission on Monday to propose a new law in the coming months on taxing tobacco in the bloc to include new products such as e-cigarettes and other vaping products – which are not covered under existing legislation.

    The initiative, led by the Netherlands, is supported by Croatia, the Czech Republic, Denmark, Estonia, Finland, France, Germany, Latvia, Slovakia, Spain, Belgium, Bulgaria, Ireland, Slovenia, and Portugal.

    In a letter to the Commission, finance ministers from the countries say an update to the bloc’s 2011 EU tobacco taxation law is needed because – in the absence of EU regulations on vaping – each country now applies different rules and levels of excise tax, distorting the bloc’s single market.

    “Based on the current directive, most of these products cannot be taxed like traditional tobacco products. The provisions of the current directive are insufficient or too narrow to meet the challenges faced by the administrations of Member States given the ever-evolving offerings of the tobacco industry,” said the joint letter, seen by Reuters.

    “Due to shortcomings in the EU legislation, Member States have taken appropriate actions at the national level. This has led to fragmentation, an uneven playing field and, ultimately, to the distortion of our internal market,” it said.

    An update to the EU tobacco taxation law was due at the end of 2022, but has been delayed and governments want the new Commission, which took office on Dec. 1 for the next five years, to address this urgently.

  • Navajo Nation Increases Nicotine Tax, Adds Vapes

    Navajo Nation Increases Nicotine Tax, Adds Vapes

    Credit: Pabrady63

    The Navajo Nation Budget and Finance Committee Vice Chair Carl R. Slater joined Navajo Nation President Dr. Buu Nygren as he signed Legislation 0145-24 into law, amending the Tobacco Products Tax to include electronic smoking devices and other nicotine products.

    Council Delegate Slater, who sponsored the legislation, thanked President Nygren for signing the bill, emphasizing its potential to reduce tobacco and nicotine use among Navajo youth.

    “We’ve seen the tobacco and nicotine industries evolve to target our young people in new ways, making them lifelong users dependent on these harmful substances,” Council Delegate Slater said. “Our traditional and sacred tobacco serves a much different purpose. It’s not about quick gratification, but about purifying our minds so our thoughts are strong, clear, and aligned with our teachings.”

    The newly implemented Nicotine Products and Electronic Smoking Products Tax applies a 22 percent tax rate to nicotine and electronic smoking devices, according to media reports. It also increases taxes on tobacco products, including an additional 12.5 cents per cigarette, $3.85 per ounce of smoking tobacco, snuff, and chewing tobacco, $1.25 per ounce of plug or twist tobacco, $2.50 per package of small cigars, and $3.62 per larger, single cigar.

    Council Delegate Slater highlighted how the Fund Management Plan for the new tax will support the Office of Traditional Culture and Spiritual Healing, which has not been funded since its creation. Additionally, the new tax revenue will support the Department of Health’s projects in partnership with traditional Navajo healer non-profit organizations.

  • UK Sets Out Vaping Tax, Tobacco Duty in Budget

    UK Sets Out Vaping Tax, Tobacco Duty in Budget

    VV Archives

    The cost of vaping and smoking will increase following tax rises announced in Chancellor Rachel Reeves’ Budget. A new tax on vapes of £2.20 ($2.85) per 10ml of e-liquid will kick in from October 2026.

    That will be accompanied by an equivalent increase of £2.20 per 100 cigarettes in tobacco duty to “maintain the financial incentive to switch from tobacco to vaping.” Reeves also set out immediate above-inflation increases of 2 percent on tobacco and 10 percent for hand-rolled tobacco.

    In its last Budget before losing the election, the previous Conservative government said it wanted to introduce a vaping tax and set up a consultation on the changes. The consultation said the tax aimed to make vaping “less accessible to young people and non-smokers while also raising revenue for funding vital public services like the NHS.”

    It had proposed different levels of tax based on the amount of nicotine in the vaping liquid, according to media reports. However, Reeves has instead opted for a flat rate. In its analysis of responses to the vaping consultation, the government said industry representatives and some public health bodies had opposed a three-tier structure, warning it could result in unintended consequences and create complex bureaucracy.

    Head of the UK Vaping Industry Association, John Dunne, called the vape tax a “nonsensical move” that penalized people who used vapes as a method to give up smoking. “Some three million adults are former smokers thanks to vaping, which is strongly evidenced as the most effective way to quit conventional cigarettes, saving the NHS millions of pounds in treating patients with smoking-related conditions,” he said.

    The new Labour government had already said it wanted to stop vapes being branded to appeal to children and has announced a ban on single-use vapes, due to come into effect in England in June 2025. Ministers have also pledged to continue plans set out by former Prime Minister Rishi Sunak to ban people born in or after 2009 from buying cigarettes.

  • Guam Governor Vetoes “Confusing” Vape Tax

    Guam Governor Vetoes “Confusing” Vape Tax

    Credit: Oleksii.

    Guam’s Governor Lou Leon Guerrero on Monday vetoed a bill that seeks a 10 percent tax on vaping and electronic nicotine products.

    The governor stated that she does not object to taxing electronic nicotine delivery systems (ENDS) to include vape products in her veto letter for Sen. Joe San Agustin’s Bill 193-37.

    “It makes sense to implement a common-sense taxing structure on ENDS products,” she wrote.

    The governor said the tax scheme in the bill would cause “unnecessary confusion and inefficiency.”

    She said the tax would apply to retail sales of vaping and nicotine products, adding the cost directly to customer receipts in a way no other product on Guam is taxed, according to media reports.

    Guam’s 2006 Tobacco Control Act already allows for vaping and nicotine products to be taxed at the same wholesale level as “electronic cigarettes,” the governor writes.

    Leon Guerrero stated that senators should instead direct the Department of Revenue and Taxation to create rules for assessing the taxation of vaping and electronic nicotine products and extend existing tobacco taxes.

    Guam law provides a sin tax of $4 per pack on cigarettes, though it’s unclear how the tobacco tax would be extended to vaping products.

    A majority of 12 senators voted to pass Bill 193-37, enough to overcome the governor’s veto if support holds.

  • ‘Ireland’s Vape Tax Puts Smokers’ Lives at Risk’

    ‘Ireland’s Vape Tax Puts Smokers’ Lives at Risk’

    Photo: Taco Tuinstra

    Ireland’s new tax on e-cigarettes is a setback in the fight against tobacco, condemning thousands of smokers to unnecessary premature death, according to international health experts.

    This week, the Irish government announced a levy of €0.50 per ml of e-liquid as part of its annual budget, adding €1.23 to the cost of a typical vape. This tax is far above the European average of €0.10 to €0.30.

    “Sweden is on the brink of achieving smoke-free status as a result of its progressive approach to safer alternatives like vaping. This contrasts sharply with Ireland’s approach, where smoking rates remain four times higher,” said Delon Human, leader of Smoke Free Sweden, in a statement.

    “Sweden’s successful policies, including lower taxes on safer nicotine alternatives, have helped reduce smoking and smoking-related deaths. In stark contrast, Ireland’s new levy will discourage smokers from switching to less harmful options, potentially keeping them addicted to cigarettes and condemning them to unnecessary premature death.”

    According to a recent Irish public consultation, only 10 percent of respondents supported increasing taxes on vaping above the EU average, while 39 percent warned that higher prices would push consumers to source products abroad.

    Through the promotion of safer alternatives like snus, nicotine pouches and vapes, Sweden has reduced its smoking rates by 55 percent over the past decade, resulting in a staggering 44 percent fewer tobacco-related deaths compared to the rest of the European Union.

    “By raising taxes on safer alternatives, Ireland jeopardizes its hopes of reducing smoking rates,” Humans said. “If Ireland truly wants to cut smoking and save lives, it should follow Sweden’s lead in promoting harm reduction, not penalize smokers for trying to quit.”

  • PMI Biggest Beneficiary of HTP Tax Cuts: Critics

    PMI Biggest Beneficiary of HTP Tax Cuts: Critics

    Image: Comugnero Silvana

    Philip Morris International would be the biggest beneficiary of New Zealand’s tax cuts for heated-tobacco products (HTPs), critics told Associate Health Minister Casey Costello, according to RNZ.

    In July, Costello announced a 50 percent cut to HTP excise taxes, arguing that doing so would encourage cigarette smokers to migrate to less unhealthy nicotine products.

    The government of New Zealand will set aside NZD216 million ($127.39 million) to pay for the tax reductions.  

    According to critics, the only commercial beneficiary of the tobacco tax cuts is PMI, which is the sole supplier of HTPs in New Zealand.

    In briefings to Costello, treasury officials questioned whether PMI would pass on the excise cut to consumers given its dominance in the market, according to documents obtained by RNZ under the Official Information Act.

    “It may be that the reduction in excise taxes is not passed through to consumers in price reductions but rather is retained by the sole importer,” the officials warned.

    In response to questions about her motivations, Costello stated that she had no connections to the tobacco business. “It’s completely wrong to suggest that the tobacco industry has anything to do with these policies, which are aimed at helping people quit smoking,” she was quoted as saying.

    Costello has repeatedly said the excise tax cut for HTPs is designed to lower smoking rates by offering alternatives for people struggling to quit. She has claimed that “HTPs have a similar risk profile to vapes.”

    Treasury officials reportedly cited evidence that HTPs are more harmful than vaping.

  • Analysts: U.K. Vape Tax Good for Tobacco Stocks

    Analysts: U.K. Vape Tax Good for Tobacco Stocks

    Image: Monster Ztudio

    Citi analysts have identified the UK government’s new excise tax on vaping products as an encouraging development for British American Tobacco PLC and Imperial Brands PLC.

    The Chancellor, Jeremy Hunt, confirmed in his Spring Budget speech that vaping products would be subject to a new tax from October 2026. According to media reports, this move is designed to maintain a financial incentive for choosing vaping over smoking, complemented by a concurrent increase in tobacco duty, according to media reports.

    The taxation framework will be based on nicotine content, with a three-tiered system imposing charges ranging from £1-3 per 10ml, in addition to the current 20 percent VAT.

    This structured approach aims to regulate the vaping market further and aligns with the government’s health strategy by providing a less harmful alternative to traditional smoking.

    Citi’s short research note said: “Although [Wednesday’s] confirmation of the planned levy on vaping comes as little surprise, we believe that alongside the proposed ban on disposable vapes from April 25, the regulatory risk/reward is skewing to the upside for both BATS and Imperial.”

  • Ireland Preparing to Implement E-Cigarette Tax

    Ireland Preparing to Implement E-Cigarette Tax

    Image: Zerbor

    The government of Ireland is working to introduce a tax on e-cigarettes in 2025, reports The Irish Times.

    Finance Minister Michael McGrath confirmed that his department had started work with the revenue department to announce the tax in the next budget and introduce it next year.

    McGrath cited the vaping industry’s “insidious” targeting of e-cigarettes toward young people as justification for the tax.

    “There’s no doubt, but it is a deliberate policy,” he was quoted as saying. “In my mind, what is happening when you see all the attractive flavors and names, it’s definitely targeting young people and very successfully.”

    While acknowledging that e-cigarettes are helping some smokers quit more harmful combustible cigarettes, McGrath also noted that there are many unknowns about the long-term effects of e-cigarettes.

    He said it was important for the Department of Finance’s proposed tax to align with policies of other departments around e-cigarettes and vapes, such as the Department of Health and the Department of Environment.

  • Indonesia Imposes 10% Excise Tax on Vape Products

    Indonesia Imposes 10% Excise Tax on Vape Products

    Indonesia will start imposing a tax on e-cigarettes from the start of 2024.

    The additional levy is on top of the existing excise levy as the country steps up efforts to limit consumption in Southeast Asia’s largest economy.

    E-cigarettes will be taxed at 10% of the prevailing excise rate, according to a finance ministry regulation, according to media reports.

    In Indonesia, tobacco products are subject to two levies — at central and local government levels — of which 50% of the revenue is earmarked for public health services.

    “Long term consumption of electronic cigarettes has been shown to affect people’s health,” the finance ministry said, adding the tax on e-cigarettes is also needed to level the playing field with conventional cigarettes.

    A group of e-cigarette producers and customers (PAVENAS) criticized the lack of discussion and the timing of the implementation of the tax, considering excise tariffs for the product will increase next year.

    The group said in a statement it may consider going to court to challenge the tax if the government goes ahead with it.

  • January 1 Begins Start of Belgium E-Cigarette Tax

    January 1 Begins Start of Belgium E-Cigarette Tax

    Credit: Master Sergeant

    Beginning January 1, 2024, Belgium will introduce a new tax on e-liquids used in electronic cigarettes. The tax will be set at 15 cents per milliliter.

    The move has received criticism from both users and retailers who fear that it will lead to increased costs and a potential shift back to traditional tobacco cigarettes.

    The spokesperson for the federal Finance Minister defended the tax, stating that it aligns with Germany’s tax rate, which is also set to increase in the coming years, according to media reports.

    They further clarified that the goal is not to encourage people to return to smoking combustible cigarettes but to recognize that e-cigarettes are also tobacco products and should be used as a temporary measure to quit smoking.