E-cig taxation measures expected to proliferate

taxation - Austin KerrGovernments around the world are waking up to the potential of taxing e-cigarettes, according to a new report from ECigIntelligence.

Thus far, only Portugal, South Korea and two U.S. states – Minnesota and North Carolina – have successfully implemented e-cigarette taxation, although Italy is also in the process of implementing a new tax.

Most current proposed and implemented regimes take the form of either a percentage tax on the wholesale price of the product, or a flat-rate tax based on the volume of nicotine-containing liquid.

“We believe the concept of a flat-rate tax based on the volume of nicotine-containing liquid, as recently implemented in North Carolina and Portugal, represents a major step for the regulation of e-cigarettes given the relative ease with which such a tax can be imposed,” says Nick Wenbourne, director of ECigIntelligence’s regulatory analysis team and author of the report.

Italy, meanwhile, is “openly seeking to recover a proportion of lost tax revenues from declining tobacco sales,” Wenbourne says. “We believe this may be attractive to many jurisdictions.”

Subscribe to our Newsletter

Join in to hear about news, events, and podcasts in the sector

    See more

    The fact that these taxes treat e-cigarettes as a separate category from conventional tobacco products is also significant, the report says, and could set a precedent that is followed by other regulatory efforts.

    What This Means: As governments seek to replace falling revenues from taxes on conventional tobacco – caused by decreasing numbers of smokers – e-cigarettes represent a logical place to turn. We should expect to see many more e-cig tax proposals over the coming year.

    For a detailed, in-depth look at e-cigarette taxation around the world, consult ECigIntelligence’s new report (available to Silver and Gold subscribers only).

    – Freddie Dawson ECigIntelligence staff

    Photo: Austin Kerr

    Freddie Dawson

    Managing editor, news
    Freddie studied at King’s College, London and City University and worked for publications including The Times, The Malay Mail, PathfinderBuzz and Solar Summary before joining the ECigIntelligence team. He has extensive experience in covering fast-moving consumer goods (FMCG), manufacturing and technological innovation.

    Our Key Benefits

    The global e-cigarette market is in an opaque regulatory environment that requires professionals to be on top of industry developments to make informed decisions and optimise their strategy.

    ECigIntelligence provides organisations with leading market and regulatory data analysis to anticipate and understand market developments globally and the impact of regulatory changes to the business.

    • Stay informed of any legal and market change in the sector that impacts your organisation
    • Maximise resources by getting market and legal data analysis daily in one place
    • Make smart decisions by understanding how the regulatory and market landscape evolves
    • Anticipate risks in your decisions by monitoring regulatory changes that impact your organization