Category: Taxation

Minimum Market Prices Set for Vapes in Philippines
The Philippine Bureau of Internal Revenue (BIR) has set a floor price for heated, vapor and other electronic nicotine-delivery systems (ENDS), reports ABS-CBN News.
The floor price for a 0.7 ml pod of nicotine is PHP131.04 ($2.29). For 1.8 ml and 1.9 ml nicotine salts, the minimum prices are PHP306.88 and PHP318.08, respectively.
Meanwhile, the floor price for a 15-ml bottle of conventional freebase nicotine is PHP207.2. A bottle that contains 30 ml of classic nicotine has a PHP352.8 minimum price.
According to BIR East NCR director Edgar Tolentino, the new guidelines will help the economy and protect the health of minors.
“BIR will have exclusive jurisdiction over taxpayer registration, setting the products’ floor price, drafting and publication of revenue regulations covering vape items,” Tolentino said.
He also said the newly appointed BIR Commissioner Romeo Lumagui Jr. has a mandate to crack down on illicit vape traders.
“We need to support the plans of the commissioner; one thing is to focus on illegal vape sellers because if smuggling persists we will be losing huge revenues from vape products,” he said.
Since 2019, the government has collected about PHP15.3 billion in vape taxes.
November 18, 2022
Korea Cracks Down on E-Cigarette Tax Evaders
A plan to strengthen the crackdown on people evading taxes on imports of tobacco-derived e-cigarette products by claiming the nicotine is synthetic, according to South Korea’s customs agency.
The Korea Customs Service said it had developed a high-precision analysis method to identify whether the nicotine contained in an e-liquid is extracted from natural tobacco or created in a lab.
This method uses a sample preparation technology called derivatization to increase the detection sensitivity of a specific ingredient contained in tobacco leaves by a factor of 30, according to The Korea Biz Wire.
E-liquids in South Korea that use natural nicotine are classified as cigarettes under tax laws, and are therefore being levied an inland duty of 1,799 won ($1.32) per 1 milliliter.
Synthetic nicotine-based e-liquids, however, that are produced with chemical materials are not classified as tobacco cigarettes but as manufactured goods, and are therefore exempt from cigarette consumption taxes.
Accordingly, there are some cases where e-cigarettes using tobacco-derived nicotine are falsely being reported as synthetic nicotine e-cigarettes to avoid taxes.
November 14, 2022
Swiss Government Proposes new E-Cigarette Taxes

Photo: Comugnero Silvana
The Swiss government has proposed new taxes for electronic cigarettes, reports SWI.
Under the plan, reusable cigarettes would be subject to a levy of CHF0.20 ($0.20) per milliliter of liquid and disposable e-cigarettes would attract a tax of CHF1 per milliliter of liquid regardless of the nicotine content.
The higher tax rate for single use e-cigarettes is intended to deter underage consumption.
The proposal is forecast to bring in around CHF13.8 million in extra tax revenues per year.
Earlier this year, voters supported a ballot to limit advertising for all tobacco products that may be seen by young people.
October 27, 2022
Azerbaijan Sets Excise Tax Rate for Vaping Products
Credit: ArtEvent ET
Azerbaijan has determined its excise rate for vaping and other e-cigarette products, according to media reports.
The Cabinet of Ministers has made relevant changes to the “Excise duties for imported excise goods into the Republic of Azerbaijan,” according to Today.az.
An excise tax rate of 14 manat ($8.20) has been set for 1,000 units of the product.
The corresponding decision will enter into force 30 days after its publication.
October 2, 2022
South Africa: Treasury Stands by Vape Tax Proposal

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The National Treasury and South African Revenue Service (SARS) is standing by its e-cigarette tax proposals despite protests from businesses, reports Businesstech.
Speaking to the parliamentary standing committee on finance this week, the National Treasury and SARS responded to comments by businesses regarding changes proposed under both the Draft Tax Administration Amendment Bill and the Taxation Laws Amendment Bill.
The National Treasury wants to apply an average excise rate for e-cigarettes of ZAR2.91 ($0.16) per milliliter and apportioned in a ratio of 70:30 between nicotine and non-nicotine elements.
Vapor companies said that considering South African consumers’ purchasing power, a ZAR0.70 duty per milliliter is more than appropriate.
The industry also cautioned that excise duty on vaping products would affect the trade of legitimate tax-paying vendors, drive job losses in the sector and drive consumers to more harmful combustible cigarettes.
The National Treasury countered that the tax is necessary and legitimate and would assist in closing regulatory loopholes that leave South Africans in vulnerable positions.
It added that the long-term health effect of e-cigarettes are unknown, and therefore the government is taking cautionary steps, even if vaping is marketed as a less harmful alternative to smoking.
In a recent report, BAT South Africa stated that the proposed excise duty on vaping products should be imposed on all “actors” equally to ensure fair competition and an equal playing field for all participants. However, prices would rise, the company warned.
The current proposed rate is an introductory rate that may be adjusted in the short to medium term, the Treasury said.
September 26, 2022
Proposed South Africa Vape Tax Would Double Prices

The proposed excise duty on vaping products in South Africa should be imposed on all “actors” equally to ensure fair competition and an equal playing field for all participants, according to BAT South Africa. However, prices would rise, the company warned.
Speaking at a standing committee on finance, the tobacco giant represented by Dane Mouyis said that according to its own data, electronic vaping products account for less than 0.5 percent of the entire nicotine product market of South Africa, according to Business Tech.
However, there is an over-proportioned number of retailers that are creating their own vaping liquid.
Mouyis said that many people are “doing it themselves” importing a few litres of nicotine liquid only to turn it into many more vials of vape liquid – an excisable product.
Under National Treasury’s proposal, the average excise rate for e-cigarettes is proposed at R2.91 ($0.17) per millilitre and apportioned in a ratio of 70:30 between nicotine and non-nicotine elements.
To ensure that tax is gathered from this trade, Mouyis said that in collaboration with Oxford Economics, it was found that a rate of R1.45/ml should be the absolute upper limit of the duty.
The representative said that considering South Africa’s affordability, a 70 cents duty is more appropriate.
Asanda Gcoyi from the Vapour Products Association of South Africa, which represent both manufacturers and retailers, warned that the tax would drive price increases onto the consumer, and one could see the average price of vape products increase by 138% and e-liquid consumption drop by 36%.
BAT stressed that an aggressive excise tax would rush consumers away to an illicit market that would subsequently grow. Gcoyi echoed this sentiment.
The tobacco company proposed the following changes for vaping products in the country:
A registration system must be introduced with the excise for manufacturers and retailers – to open the market up to the South African Revenue Service (SARS). Gcoyi added that the proposed tax was problematic as the rationale behind it was flawed.
She said that the scientific basis of the tax is inaccurate in that the National Treasury sees the vaping industry as attempting to undermine global tobacco efforts – while many international studies have actually pointed to vaping as being a harm reduction practice dissimilar to traditional smoking.
She added that the goal of the excise is unclear as the Treasury has provided little detail on how it would be beneficial to public health, and not enough research has been concluded on youth uptake.
The introduction of the excise will have significant unintended and irrational consequences, one being that the proposed duty would make vaping more expensive than smoking and create an illicit trade – thus going against the doctrine of harm reduction, said Gcoyi.
The Vapour Products Association has since called on businesses to oppose the excise duty and for the Treasury to conduct further market research on the implications of its proposal.
September 20, 2022
Alaska Governor Vetoes Vape Purchasing Age Increase

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Alaska Gov. Mike Dunleavy vetoed SB 45, a bill that would have raised the minimum age to purchase e-cigarettes and other tobacco products in the state from 19-years-old to 21-years-old. The move would have brought the state in line with federal minimum age requirements.
The governor vetoes the bill because it also included the implementation of a tax on e-cigarettes and other vaping products.
The bill sought to create parity in the excise tax rate on electronic smoking products, which are currently not subject to state-level taxes as they are not considered either cigarettes or other tobacco products (OTP).
The bill would have subjected electronic smoking products to a tax rate of 35 percent of the wholesale price, which would still be less than the state’s rate of 75 percent of the wholesale price on other tobacco products.
“Governor Dunleavy’s decision to veto this bill is a huge relief to Alaskans who rely on vaping products to stay away from deadly combustible cigarettes. Rejecting the tax hike will also make it easier for those who currently smoke to achieve cessation using vapor products, said Tim Andrews, director of Consumer Issues for Americans for Tax Reform. “Governor Dunleavy’s veto was necessary and highly appropriate. As a proud signer of the ATR Taxpayer Protection Pledge, Governor Dunleavy has made a commitment to his constituents to oppose all tax increases. This veto is proof of his dedication to the taxpayers of Alaska and we applaud this pro-science, pro-taxpayer decision.”
Dunleavy did not say whether or not he supported the age increase, but noted that it is not possible to separate out components of a bill once it has been passed by the legislature.
“There were many conversations about what an appropriate level to tax would be, but ultimately a tax increase on the people of Alaska is not something I can support,” Dunleavy wrote in his veto letter to Senate President Peter Micciche.
Since the governor vetoed the bill after the adjournment of the legislature’s second regular session, the veto will not be addressed unless a special session is called before the next legislative session convenes, according to Halfwheel.
September 12, 2022
Kenya Plans to Raise Taxes on Vaping, Nicotine Products
Location Kenya. Red pin on the map.
Kenya’s Treasury Cabinet Secretary, Ukur Yatani, has proposed to change the excise tax on liquid nicotine to Sh70 ($0.60 cents) per milliliter in a bid to make it less accessible to users, including school children and the youth.
Vaping industry advocates warn the new proposals to raise excise tax on nicotine products will push safer alternatives for smokers out of reach and help the black market thrive, according to The Standard.
Campaign for Safer Alternatives (Casa), a lobby that aims for smoke-free environments in Africa, said the tax changes would result in higher prices of e-cigarettes and negatively impacting those who rely on them to help them stay off cigarettes.
“Doubling the tax on vapes and nicotine pouches is the opposite of a cash cow. If anything, it will drain more money from the Treasury by forcing vapers into the black market,” said Casa chairman Joseph Magero on the proposals contained in the Finance Bill.
“Already, Kenya’s sky-high vaping taxes have created a thriving black market for vape products, with many shops selling un-taxed vapes in broad daylight.”
He said the tax increase will also raise the healthcare costs for Kenya’s government by leaving vapers with no choice but to revert to smoking or using unregulated black market vapes.
April 29, 2022
Vape Tax, Tobacco 21 Clears Alaska Senate, Heads to House
Credit: Yossarian6
The Alaska Senate on Wednesday evening passed a bill that would raise the legal age to buy and sell vaping and other tobacco products from 19 to 21. It would also impose the first statewide tax on vaping.
If the bill passes through the Alaska House of Representatives, e-cigarettes or vapes would be taxed at 45 percent of their wholesale price, according to Alaska’s News Source. The Senate passed SB 45 on a 15-4 vote. All four of the “no” votes were by Republicans.
There would be some exceptions under the new bill if it becomes law. Alaskans who are 19 and older who currently sell tobacco products would be grandfathered into the new age limits. Tobacco cessation devices that are approved by the Food and Drug Administration would not incur the new tax rate for e-cigarettes.
SB 45 also toughens up age-verification requirements for sellers of tobacco while cutting the fine on violations for underage smokers from a maximum of $500 to $300.
In 2019, former President Donald Trump signed a bill into law that raised the federal age to consume tobacco products to 21. Alaska is currently one of 12 states that have not made the same shift in state law.
The legislative session must end by May 18.
April 22, 2022
South Africa: Concern Over New Vaping Rules
Photo: Adrian | Adobe Stock
The Free Market Foundation is concerned that the South African government’s plans for regulating vaping products will push more people back toward smoking combustible cigarettes and buying from the black market, reports BusinessTech.
“The South African government argues that e-cigarette and vaping products are harmful and warrant regulation,” the Free Market Foundation said. “However, e-cigarettes and vaping innovations are tobacco harm reduction products aimed at mitigating the adverse health impacts associated with combustible tobacco products.”
“The total excise duty to be levied on nicotine and a non-nicotine solution, e-cigarettes and vaping, will range from ZAR33.30 [$2.28] to ZAR346. Therefore, poorer communities suffering disproportionately from tobacco-related diseases would be more incentivized to continue smoking cigarettes than pick healthier alternatives.”
“In reality, smokers may simply opt for illicit products, which are cheaper and constitute 42 percent of the informal market for cigarettes. Additionally, illicit goods are more harmful since production standards are not adhered to.”
The illicit cigarette market in South Africa grew substantially during a temporary ban on tobacco and it has yet to shrink to pre-lockdown volumes.
“National Treasury’s proposals to tax e-cigarette solutions that contain no tobacco or nicotine may, in particular, be questioned by some stakeholders as it does not necessarily support the government’s stated policy intention of reducing the consumption of tobacco products,” said Webber Wentzel, a legal firm. “It also could stimulate the illicit trade in e-cigarettes as has happened in the tobacco sector.”
The proposed tax would go into effect Jan. 1, 2023, if passed.
March 28, 2022