Category: Taxation

TED Input: 84% of Submissions Warn of Higher Vape Tax
On the heels of a recently ended consultation on the update of the Tobacco Excise Directive (TED), the World Vapers’ Alliance (WVA) strongly urges policymakers to stay away from equating smoking tobacco and vaping, especially when it comes to taxation.
Credit: Tabrez Syed
The TED update lays out the European Commission’s intention to tax vaping products similarly to how cigarettes are taxed.
“Making vaping less appealing to smokers by higher prices will discourage current smokers from switching to less harmful alternatives,” said WVA director Michael Landl. “This is certainly not going to be of any public health benefit. Additionally, high taxes on vaping products are particularly harmful to the lower income brackets of the population, which make up the largest proportion of current smokers.”
The consultation ended on 5 January and out of 134 responses from citizens, associations and industry, 113 (84 percent) referenced the positive impacts of vaping and the serious negative impact that taxing it the same as cigarettes would have, according to EUreporter.com.
“I am delighted by the overwhelming number of responses in favour of vaping to this consultation,” Landl said. “It shows that many people know the potential for harm reduction of vaping. What policymakers need now to understand is that tax hikes on vaping will lead to people switching back to smoking, an outcome absolutely nobody wishes for.
“Therefore, for the WVA it is important that non-combustible products are not regulated and taxed the same way combustible tobacco is. Lawmakers need to follow the scientific evidence and abstain from tighter regulation and higher taxation of vaping products.
“If we want to reduce smoking induced burdens on public health, access and affordability to vaping products need to be guaranteed,” Landl concluded.
January 8, 2021
Oregon’s E-Cigarette Tax Hike Takes Effect Friday
E-cigarettes will be taxed for the first time in Oregon beginning Friday, Jan. 1. Also, Oregon’s tax on combustible cigarettes will increase by $2 per pack after voters overwhelmingly approved Measure 108 last month.
Electronic nicotine delivery systems (ENDS), such as vaping and e-cigarette products, will be taxed at a rate of 65 percent of the wholesale purchase price. Oregon’s cigarette tax will now be $3.33 per pack, the sixth-highest in the nation and the highest on the West Coast.
Credit: Pasja1000

In addition to saving lives, the cigarette tax increase is projected to raise nearly $135 million in annual revenue, according to data from the Campaign for Tobacco-Free Kids and Tobacconomics.
The new revenue will provide access to health care on the Oregon Health Plan at a time when health care coverage is critical, and fund the state’s tobacco prevention and cessation programs to help people quit tobacco successfully, according to a press release.
December 30, 2020
Digital Tax Stamps for ENDS Starts Jan. 1 in UAE
Electronic cigarettes cannot be sold in the United Arab Emirates (UAE) unless they bear the digital tax stamp (DTS) beginning January 1, according to the Federal Tax Authority (FTA).
Credit: Jan Vasek
Electronic nicotine delivery systems (ENDS) products cannot be sold, transported, stored or possessed without the tax stamp. The DTS system helps the FTA “improve its ability to collect excise tax charged” on such products on being imported or manufactured locally. It also enables “stakeholders to analyse the supply chain to better control illicit tobacco products,” according to a story in the Khaleej Times.
In addition, the DTS system allows for the implementation of compliance standards. The FTA explained that the DTS system “facilitates inspection and control at customs outlets and local markets”.
The digital stamps will be placed on the packages of vapor, shisha and other tobacco products and registered in the FTA database. The DTS contains data that can be read with a special device to make sure all taxes due have been paid.
“When orders are made for these stamps, they are sent to factories to be placed individually. This will ensure each package is tracked to the port of entry of each country, with the supplier submitting the permit form and the fees for the digital stamps … This will ensure all digital stamps are registered and tracked through a central database,” the FTA said.
December 22, 2020
Estonia Exempts E-liquids From Vapor Tax Until 2022
On Wednesday, the Riigikogu, the unicameral parliament of Estonia, passed an amendment that exempts e-liquids from its excise duty until the end of 2022. By suspending the collection of excise duty, entrepreneurs will be given the opportunity to reduce the price of e-liquid and thus create an incentive for users to purchase products from Estonian sales outlets, not from border trade or the black market, according to Estonian officials.
Credit: Crew2139
The amendments will take effect on April 1, 2021. According to the amendments, excise duty on e-cigarette liquids will be suspended until the end of 2022. Also, the Alcohol, Tobacco, Fuel and Electricity Excise Duty Act will not apply to e-cigarette liquids during that time. During the period when e-liquids are not subject to excise duty, e-cigarette tax stamps do not give rise to an obligation to pay excise duty.
Tarmo Kruusimäe, chairman of the Riigikogu’s smoke-free Estonia support group, said the amendment will help better the health of the Estonian people.
“From June 1, 2018, an extremely high excise duty on e-cigarette liquids came into force in Estonia, as a result of which the black market and cross-border trade flourished. By suspending the collection of excise duties for two years, we are giving traders the opportunity to lower the prices of e-liquid products,” Kruusimäe said, according to an article in the err.ee.
The break in excise duty payment provides an opportunity to change the habits of consumers by redirecting them back to legal, laboratory-tested products, according to Kruusimäe. He also said that Estonia’s tobacco policy so far has been only based on scolding, without the realization that it is not easy for people to overcome an addiction.
“Estonia ranks third in Europe in tobacco deaths. Proven and less harmful alternative tobacco products are helping people quit cigarettes. By offering alternatives, we help maintain the health of the Estonian people,” he said.
Altogether 53 MPs on Wednesday voted in favor of the bill of amendment to the Alcohol, Tobacco, Fuel and Electricity Excise Duty Act initiated by Isamaa, the Estonian Conservative People’s Party (EKRE) and the Center Party.
December 17, 2020
Malaysian Vapor Group Wants Nicotine E-liquids Taxed
The Malaysian Vape Chamber of Commerce (MVCC) urged the government to impose excise duty on vape e-liquids with nicotine. In a statement, the MVCC also said “the vape industry must be quickly regulated, including regulating standards for vape e-liquids with nicotine.”
Credit: Peter Nguyen
During the Budget 2021 presentation in November, it was announced that an excise duty on liquids for e-cigarettes and vaporizers at a rate of RM0.40 per ml would be imposed in January. Recently, the Royal Malaysian Customs Department announced that the tax shall be imposed only on non-nicotine vape liquids.
Syed Azaudin Syed Ahmad, president of MVCC, said, “Any taxation and regulation imposed should be holistic and take into account the current market situation,” according to an article in the Malay Mail. “In the local market, more than 97 percent of the vape e-liquids sold contain nicotine, with a similar trend seen in other countries. However, there is still no taxation and regulation covering vape e-liquids with nicotine.”
He added that if the tax “is implemented only for non-nicotine liquids, the move would be an exercise in futility as it does not take into account industry and consumer needs.”
MVCC estimated that the vape industry in Malaysia is worth more than RM2 billion annually.
“Countries such as UK, New Zealand and Canada acknowledge the role of vape in helping cigarette smokers quit smoking and switch to vaping, which has proven to be less harmful than smoking,” said Syed Ahmad. “These countries also have regulations that cover the industry and enable consumers to obtain products that adhere to standards that have been set.”
December 17, 2020
Tennessee Revenue Dept. says ‘No Tobacco, No Tax’
The Tennessee Department of Revenue stated in a notice on Wednesday that e-cigarettes, vape devices and hemp and herbal cigarettes without tobacco aren’t subject to the state’s tobacco tax.
Credit: ICB
When hemp and herbal product cigarettes don’t contain tobacco, they aren’t subject to the state’s tobacco tax, according to Notice 20-21, according to an article on law360.com.
E-cigarettes and vape devices transform liquids into gas and allow inhalation of vapor. While the liquid cartridges can contain nicotine and other compounds, they’re not subject to the tobacco tax because they don’t contain tobacco, the notice said. Smokeless oral nicotine patches also are not subject to the tobacco tax, the notice said.
The notice also said that while many new products are being introduced in the state, some with nicotine and others packaged like tobacco products, the department will not apply the tobacco tax to nontobacco products without statutory clarification on what is considered a tobacco substitute.
Tennessee imposes a tax on the privilege of selling cigarette and tobacco products. Cigarettes are taxed at 62 cents per pack of 20, and other tobacco products like cigars and snuff are taxed at 6.6% of the wholesale cost, the notice said.
December 10, 2020
Malaysia to Place Excise Tax on Vapor Starting 2021

Credit: Peter Nguyen
All imported electronic cigarettes, e-juices and other vaping products, including non-nicotine types, will face an excise duty beginning Jan. 1, 2021. Exceptions will be given to local manufacturers, Customs Department director-general Abdul Latif Abdul Kadir said today.
Excise duty would be charged on the devices at an “ad valorem” (according to value) rate of 10 percent, while liquids and gels will be charged a rate of SEN0.40 for each millilitre, he said.
Abdul Latif said local manufacturers would be licensed under Section 20 of the Excise Act 1976 with a licence payment of RM4,800 a year ($1,779), while the warehouse licence fees under Section 25 of the same Act would be RM2,400 a year, according to an article in Free Malaysia Today.
“Local manufacturers have to apply at the respective zone or state Customs Department offices where the factory or warehouse is located before Dec 15, 2020,” he said in a statement today.
Among other things, the applicants will have to declare the raw ingredients list, finished products list, manufacturing flow chart, annual manufacturing capacity, and acknowledgment of nicotine content in liquid or gel.
“Licence holders are required to comply with licensing guidelines and to attach a bank guarantee to secure the duty or tax,” he said.
Abdul Latif said manufacturers could refer to the FAQ page regarding the excise duty at the Customs website.
December 8, 2020
Experts: South Africa Should be Weary of Vape Tax
Imposing excise on vapor products in a country like South Africa could prove detrimental, instead encouraging the kind of illicit trade that was seen for contraband cigarettes during the Covid-19 hard lockdown, Vapour Products Association of South Africa (VPASA) has warned.
Credit: Tim Johnson
The warning came from the Vaping Conversations series, hosted by VPASA, by Arshad Abba, a partner at management consultancy Quantum Logik Consulting and the lead on the 2018 Canback study on vaping and its economic impact in South Africa, according to an article in The Sunday World.
Abba was among the high-profile panel of speakers sharing the platform with moderator Dr Delon Human, co-chair of the Africa Harm Reduction Alliance (AHRA), and fellow speaker Professor Donato Raponi, a freelance tax consultant and an honorary professor of European Tax Law at the Ecole Supérieure des Sciences Fiscales in Brussels, Belgium. Raponi has been ranked several times among the 10 most influential people in the world in tax matters by the International Tax Review.
The final diginar for the year comes as the controversy around the impending Control of Tobacco Products and Electronic Nicotine Delivery Systems (COTPENDS) Bill gathers force. Audience members included government stakeholders, parliamentary representatives and harm reduction advocates, among others.
Raponi, who has worked as an academic and in both the private and public sectors, presented a compelling narrative for the development of a tax framework for vapor products.
“A tax system should be stable but flexible enough to take into account future challenges,” he said, adding that government bodies needed a clear vision on questions such as what to tax, why they impose a tax, what they want to tax, how they tax, how they collect tax, and how the tax will be controlled.
“These points are especially important as the share of the market by vapor products is limited, meaning revenue from taxation would therefore also be limited,” he added.
November 30, 2020
Anchorage, Alaska Passes 55% Wholesale Vapor Tax

The Anchorage Assembly last week passed an ordinance to include vaping and electronic cigarette products under the city’s existing tobacco tax. This means tobacco vaping devices and e-cigarettes, as well as the liquids and cartridges that are used with the devices will be taxed at 55 percent of the wholesale price.
According to an article on alaskapublic.org, Assemblywoman Suzanne LaFrance and Assemblyman Christopher Constant proposed the ordinance to combat vaping among minors, which has seen a sharp rise in recent years.
Some vape shop owners opposed the ordinance, arguing that vaping products are helpful for adult smokers trying to kick their habit.
“Imposing this tax on something that is actually helping people get away from combustible cigarettes and actually costing the state and local resources less money seems a little problematic,” said Shaun D’Sylva, a co-owner of Fatboy Vapors in Midtown.
Traditional cigarette smoking has been declining for decades, in part because of public information campaigns, smoke-free laws and increasing tobacco taxes, said Marge Stoneking, executive director of the American Lung Association in Alaska. Alaskan public officials also have often been accused of spreading misinformation about vaping products, according to industry experts.
“Now e-cigarettes are addicting a new generation of youth, threatening all of that progress,” Stoneking said. “Significantly increasing taxes on tobacco products results in fewer kids starting to smoke and more adults quitting while at the same time providing revenue to the municipality.”
November 16, 2020
Malaysia to Tax E-Cigs and Vapor Products at 10%

Credit: Esmonde Yung
Malaysia will implement an excise duty at an ad valorem rate of 10 percent on all types of vapor and e-cigarette products. Finance Minister Tengku Datuk Seri Zafrul Abdul Aziz says the tax includes all types of electronic and non-electronic cigarette devices, including e-liquids.
“Electronic cigarettes liquid too will be subjected to an excise duty at a rate of .40 sen (cents) per millimeter,” he said during the tabling of the Budget 2021 in parliament today. The tax takes effect on Jan. 1, 2021.
Tengku Zafrul said taxes would be imposed on cigarettes and tobacco products on all duty-free islands and any free zones that have been permitted retail sales of duty free cigarettes, according to a story on thestar.com. He added that the issuance of new cigarette import licenses would also be frozen.
He said that the transhipment of cigarettes activities to selected ports would also be limited.
“We will impose taxes on drawbacks on all imported cigarettes for the purpose of transhipment and re-exports,” he said, adding that transhipment activities and re-exports of cigarettes using pump boats would also not be allowed.
November 6, 2020