Tag: tax

  • Guam Leaders Propose Excise Tax Rules for Vapes

    Guam Leaders Propose Excise Tax Rules for Vapes

    Credit: Sezerozger

    Lawmakers in Guam are proposing to impose a 10 percent excise tax on all vape products for the first year, and then raising it to 20 percent on the second year.

    Guam currently has no standardized tax regulations for what the bill describes as electronic nicotine-delivery systems (ENDS).

    The bill, if enacted into law, will make the taxation for vape products separate from the existing tobacco retail category.

    They do not include regulated cannabis products, according to Pacific News Daily.

    Sen. Joe San Agustin and three other Democrat and Republican senators proposed the new rules. San Agustin, chairman of the appropriations committee, said the proposed tax on ENDS products came after realizing the loss of millions in revenues in the Healthy Futures Fund where it showed major shortfalls in revenues from tobacco taxes.

    Under Bill 193-37, or the ENDS Excise Tax of 2023, the tax will be imposed on all ENDS products at the point of sale and will be made visible as a line item on the receipt.

    Under the bill, the annual retail license will be $200, and the annual wholesaler license will be $2,000.

  • South Africa Public Comment Period on Vape Tax Ends Soon

    South Africa Public Comment Period on Vape Tax Ends Soon

    South Africa
    Credit: Tim Johnson

    South Africa’s National Treasury (SANT) says the public comment period on its proposals to impose a specific excise tax on both the non-nicotine and nicotine e-liquids for vaping products will end on Feb. 7, 2022. The SANT published a draft discussion paper in December 2021 on the proposed taxation of electronic nicotine delivery systems (ENDS) and electronic non-nicotine delivery systems (ENNDS).

    Traditional tobacco products in South Africa are subject to excise duties at a rate of 40 percent of the price of the most popular brand in each tobacco category, according to Longevity. When applied to e-cigarettes, users could pay excise duty ranging from ZAR33.60 to ZAR346.00 ($22.50) per product, depending on the nicotine content and size of that product. The average excise rate for e-cigarettes is proposed at ZAR2.91 per mL and apportioned in a ratio of 70:30 between nicotine and non-nicotine elements.

    Basically, users could pay ZAR2.03 per mL of e-liquid containing nicotine and 87 cents per mL of e-liquids that contains no nicotine, if the draft proposals are accepted and become legislation. Products with a higher nicotine content will attract a higher rate of duty compared with lower nicotine products.

    Manufacturers and importers who become liable for the proposed excise taxes on e-cigarettes will need stringent certifications by accredited laboratories, which use either South African National Accreditation or International Laboratory Accreditation Co-operation (ILAC) approved methodologies.

    According to 2021 study commissioned by the Vapor Products Association of SA, the vapor industry in 2019 contributed ZAR2.49 billion to South Africa’s GDP while paying ZAR710 million in taxes. More than 350,000 South Africans use vapor products.

  • Vapor Tax Resurfaces in Biden’s Build Back Better Act

    Vapor Tax Resurfaces in Biden’s Build Back Better Act

    Photo: DedMityay

    U.S. Lawmakers have reintroduced a tax on vapor products into the Biden administration’s Build Back Better Act, reports the Winston-Salem Journal. Earlier a series of controversial tobacco hikes had been removed from the legislation.

    The latest version of the bill calls of $50.33 per 1,810 milligrams of nicotine for “any nicotine product that has been extracted, concentrated or synthesized.” The previously proposed vapor tax was $100.66 per 1,810 mg.

    Vapor industry representatives were unimpressed. “American voters are already livid with paying high prices at the pump and the grocery store,” Amanda Wheeler, president of the American Vapor Manufacturers Association, was quoted as saying by the Winston-Salem Journal.

    “It’s a certainty they will be outraged with a gigantic tax on a product that millions use to quit cigarettes.”

  • UAE Defers Ban on Vapor Products Sans Tax Stamp

    UAE Defers Ban on Vapor Products Sans Tax Stamp

    Photo: Vitaliy Purtov | Dreamstime.com

    The UAE’s Federal Tax Authority (FTA) has announced the postponement of the implementation of the ban on supplying, transferring, storing, and possessing electronic cigarettes without digital tax stamps until to January 1, 2021.

    The ban was previously scheduled to come into effect from June 1, 2020, in line with phase two of the ‘Marking Tobacco and Tobacco Products Scheme’, the FTA said in a statement on Tuesday, according to the official news agency WAM. The ban also includes water pipe tobacco.

    “This extension on the timeline provides them with seven additional months to prepare for the mandatory implementation of the ban,” said FTA director-general Khaled Ali Al Bustani, according to a story in gulfbusiness.com.

    “It also comes in response to the concerns expressed by stakeholders in the tobacco sector, and their requests for such an extension that would allow them to sort out any issues resulting from the current difficult circumstances and the necessary precautionary measures that were enforced to prevent the spread of the novel coronavirus. The decision provides them enough time to sell off any remaining tobacco products that do not carry the digital tax stamps.”

    As part of the Covid-19 pandemic, restaurants and cafes across the country were temporarily closed and hence there is an existing stockpile of water pipe tobacco and electrically heated cigarettes in the UAE.

    “The FTA has consulted all relevant business sectors, as well as the operator of the Scheme’s electronic system, and reassured all stakeholders that it fully understands the difficulties brought on by the current crisis, asserting its commitment to minimising the impact of the ban on businesses, and encouraging them to comply with tax procedures and legislation,” added Al Bustani.

    The UAE banned the import of electric cigarettes and water pipe tobacco without ‘digital tax stamps’ from March 1.

  • California to Propose Higher Vapor Taxes

    California to Propose Higher Vapor Taxes

    Credit: Alexander Mils

    When Governor Gavin Newsom submits his revised budget proposal on Thursday, it will include a vapor tax increase. California currently taxes vapor products at 59.27 percent of wholesale value, but the proposal would impose an additional tax at a rate of $2 for each 40 milligrams of nicotine in the product.

    The tax would take effect January 1, 2021 and is forecasted to raise $32 million in FY 2021. Collections would be allocated to administration, enforcement, youth prevention, and health care workforce programs. The budget summary also stipulates that the governor supports a statewide ban on all flavored nicotine products (including menthol cigarettes), according to an article on taxfoundation.org.

    The impetus for this proposal is increased youth vaping in the state. A nationwide survey of high schoolers, published in the fall of 2019, found that 27.5 percent of students had vaped at least once in the prior 30 days, though only 10 percent of students were considered regular users (defined as vaping 20 days out the prior 30). While youth uptake is a very real concern which deserves the public’s attention, punitive level taxes and outright bans could impede historically high smoking cessation rates.

    California is the latest state to try to increase vapor taxes. This year, Kentucky, Utah, Virginia, and Wyoming have already passed increases to vapor taxes, which means 25 states and the District of Columbia now tax vapor products.

  • Maryland Governor Vetoes Vapor Tax

    Maryland Governor Vetoes Vapor Tax

    Photo: Getulio Moraes

    The US state of Maryland’s Governor vetoed vapor tax legislation in House Bill 732. The vapor industry initially faced an 86 percent wholesale tax on all vapor products, which included devices and liquids.

    The Maryland General Assembly spent a majority of the legislative session in search of new revenues to fill budget gaps and eventually turned its attention to vapor products, according to Tony Abboud, executive director for the Vapor Technology Association (VTA).

    The VTA and the Maryland Vapor Alliance (MVA) engaged key committee members, participated in hearings, and worked behind the scenes to offer alternatives to the 86 percent tax, according to a press note. “After much debate, the General Assembly decided to move forward with a 12 percent point of sale tax on devices and liquids with an exception on containers under 5 milliliters, which would have a 60 percent wholesale tax,” the note states. “After the tax passed, VTA and MVA worked to educate the Governor’s Office on the adverse impact such a tax would have on Maryland small businesses.”

    Governor Larry Hogan then vetoed the legislation. “These misguided bills would raise taxes and fees on Marylanders at a time when many are already out of work and financially struggling. With our state in the midst of a global pandemic and economic crash, and just beginning on our road to recovery, it would be unconscionable to raise taxes and fees now,” Hogan said.  
     
    In Maryland, a three-fifths vote of the elected members of both chambers is necessary to override the Governor’s veto. Because there were several tax increases vetoed, there could be efforts in the General Assembly to override the veto, according to the VTA.