Tax is coming – Time to take off the blindfold in the electronic cigarette rush?

Today (October 26), the electronic cigarette circle is boiling again.

Finally, there’s a piece of news from the United States. According to Bloomberg News recently, the house fundraising committee approved the electronic cigarette tax, which will be the first tax on nicotine liquid in the United States. The aim is to prevent teenagers from vaping, which can raise the price of e-cigarettes to a level that teenagers can’t afford.

Who is issuing tax bills for e-cigarettes?

Once the trend direction of electronic cigarettes in the United States is moving, obviously the first one to bear the brunt is Juul, the electronic cigarette giant.

The China media has calculated that its nicotine content is 3% and the tax amount for 0.7ml liquid is US $0.68, the average nicotine content of Juul’s pod is 5%, the e liquid is 0.7ml and the tax amount is US $1.15. As a result, the price of the current $15.99 group of Juul pods will increase by $4.6. However, as for the news that it may be “taxed”, Juul China told that it had not received the relevant notice.

As for the e-cigarette tax, there is no official announcement in the United States, which is true or false, and the specific situation needs to wait for some time.

In the United States, a nearly saturated and highly mature e-cigarette market, the topic is still ongoing. On August 23, the first suspected e-cigarette death in the United States occurred in Illinois. Data show that at least 22 patients aged 17-38 in the state have the same symptoms after using electronic cigarettes.

After a few days of fermenting, on September 12, Trump met at the White House with heads of the U.S. Department of health and human services (HHS) and the FDA (Food and Drug Administration) to discuss the health threat posed by e-cigarettes, and announced a ban on all non-traditional tobacco flavors in the U.S. market. At the end of September, Juul announced that Kevin burns, the chief executive, had resigned as CEO, replaced by K.C. crosswaite, a former Altria executive, and stopped advertising products on all TV, Internet and paper media in the United States.

However, in the end, the latest investigation results of lung injury caused by the use of electronic cigarettes show that hemp products play a role in the epidemic: on September 28, the United States Centers for Disease Control and Prevention (CDC) published the weekly morbidity and mortality report on its official website, indicating that 77% of the respondents used products containing THC (tetrahydrocannabinol), or at the same time Products containing THC and nicotine were used.

Nevertheless, the panic brought by the e-cigarette crisis cannot be eliminated in a short time. In mid September, Wal Mart announced that it would stop selling e-cigarettes, followed by the U.S. supermarket chain giant Kroger and the largest drugstore chain operator Walgreens.

If the e-cigarette tax is really coming, it is the fundamental plan issued by the relevant U.S. government agencies at this stage, which has practical restricting power on e-cigarette. In fact, the Philippines, Russia and other countries are conducting electronic cigarette control through a series of means such as tax.

Since July, the Philippines has imposed a consumption tax on e-cigarettes and heating tobacco products, and then gradually proposed a bill to further raise the tax rate. Carlos Dominguez, Philippine finance minister, recently said that in the context of growing global concerns about the health risks of e-cigarettes, the Philippines will increase consumption tax to prevent more people from using e-cigarettes, but it is unlikely to ban the sale and use of such products. The bill could raise the tax rates 4 times on e-cigarettes and heated tobacco products.

“I don’t think we’re going to ban it,” Domingo said. We believe that electronic cigarettes already exist and are very popular in the Philippines and cannot be banned. ”

Russia has also increased its tax on e-cigarettes. In the middle of this month, Veronika skvortsovam, Russia’s health minister, said that the Russian Ministry of health had drafted a bill to impose a consumption tax on e-cigarettes and justified the proposed tax bill by saying that “e-cigarettes are attracting people to smoke”.

Russia’s new law stipulates that from January 1, 2020, the consumption tax of all electronic nicotine transmission systems will increase year by year: the consumption tax of vapes and HNB devices will be increased to 50 rubles (5.2 yuan), 52 rubles (5.4 yuan) in 2021 and 54 rubles (5.6 yuan) in 2022; in 2020, the consumption tax of e-liquid will be 10 rubles 13 rubles (1.4 yuan), 14 rubles (1.5 yuan) in 2021 and 15 rubles (1.6 yuan) per 1 ml in 2022.

On October 23, the South Korean government also said it would speed up research to decide whether to ban the sale of liquid electronic cigarettes, and has begun to recommend that people immediately stop using related products.

But some countries are more open. Unlike the aggressive attitude, Britain, New Zealand and parts of Europe are trying to justify e-cigarettes. For example, Martin Dockrell, head of tobacco control at the British Ministry of public health, said: the problem is often the consumers who buy or make illegal e-liquid on the street. Most of the illegal vapes contain cannabis ingredients, such as THC. These products come from the black market, which is different from the electronic cigarettes purchased through regular channels.

Turn around and look at China, but the puzzle is still to be solved.


What will electronic cigarette tax bring?

It is said that the national standard of electronic cigarettes will come in October, but there is no exact news so far.

Blue Hole New Consumption wrote last month that it was unable to find the progress of electronic cigarettes related to national standards on the official website of the national standards committee. However, the previous screenshots show that the first one is the national standard of electronic cigarette, which is under the centralized management and implementation of TC144 (National Tobacco Standardization Technical Committee). The competent department is the National Tobacco Monopoly Bureau, and has entered the “approval in progress” stage.

The second national standard is the gas chromatography method for the determination of nicotine, propylene glycol and glycerol in electronic cigarette liquid, which is also under the jurisdiction of TC144 (National Tobacco Standardization Technical Committee), and the competent department is the National Tobacco Monopoly Bureau. Before that, the national standard has also entered the “approval in progress” stage, which is now suspected to have exceeded the cycle. However, the national standard information of e-cigarettes was also removed from the official website of the standards committee, which was also caused by the new version of the website.

When will the national standard show up? Some insiders said it was “too early”. Others said that the release of the national standard had been postponed to next year.

The future management of e-cigarettes is likely to belong to the State Tobacco Monopoly Bureau, and e-cigarettes tax is likely to be the next management action. First of all, the first role of e-cigarette tax is to help reduce the use of e-cigarettes by minors from the perspective of price, as the United States thinks, but it is obviously impossible to completely eliminate it. After all, it is a long tail proposition that needs to be solved from all angles.

In addition, the arrival of electronic cigarette tax, to a certain extent, can help speed up the shuffle of electronic cigarette industry.

The national standard has not yet been implemented, which gives all e-cigarette brands more breathing opportunities. For the e-cigarette enterprises with insufficient product compliance, weak financing ability and unhealthy cash flow, when the e-cigarette tax comes, it’s almost the end of the running day.

At present, the tobacco related taxes in China mainly include consumption tax, value-added tax, enterprise income tax, tobacco tax, etc. In the middle of this year, Mao Qunan, director of the planning department of the national health and Health Commission, said that theHealth Commission supports the reduction of tobacco consumption through tax means, and will further study the possibility of tax price adjustment with relevant departments.

The Interface has sorted it out. The latest adjustment of tobacco tax in China was in May 2015. Compared with 2014, the wholesale price and retail price of category I-V cigarettes increased in 2015. The proportion of tax in retail price increased from 52% to 56%, and the tax profit increased from 911 billion yuan to 1095 billion yuan. According to the data of the World Health Organization, one year after the tax adjustment, China’s cigarette sales decreased by 4.61%, and the number of smokers decreased by about 5.1 million. In the future, the number of deaths due to smoking decreased by about 1.13 million.

“However, there is still a gap between China’s current tobacco tax revenue as a proportion of its sales price and the 75% recommended by the World Health Organization. According to the report of the World Health Organization, China’s tobacco tax rate in 2016 was 51%, ranking 102nd out of 188 countries and regions. ”

Mao Qun’an also made it clear that the national Health Commission is working with relevant departments to carry out research on the supervision of e-cigarettes, and plans to regulate e-cigarettes through legislation.

The debate on whether e-cigarettes are safe and healthy will always be there, at present, the most practical thing is to care about when e-cigarettes can really be included in the benign regulatory category. But at last, it’s on the way.

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