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E-cigarettes will increase consumption tax and raise prices

E-cigarettes will increase consumption tax and raise prices

2022-08-04

Recently, some media reported that the national standard e-cigarette products will be subject to an additional consumption tax of 36% with reference to Class B cigarettes, which may lead to a price increase of at least 30% of the main products in the market. Before October 1, non-national standard products that can still be sold normally are not included in the price increase because they do not involve consumption tax. The reporter learned from a number of leading e-cigarette companies and store owners, and they all said that they have not received official news about tax changes.


Expert: The landing of e-cigarette "tax" should be within expectations


Is the increase in consumption tax on e-cigarettes coming? With the legalization of the identity of e-cigarettes, a number of supporting policies have been introduced one after another. In the revision decision of the "Regulations on the Implementation of the Tobacco Monopoly Law" in November last year, it was clarified that "new tobacco products such as electronic cigarettes shall be implemented with reference to the relevant provisions of cigarettes". This year, two documents on e-cigarette products and industry norms, "E-Cigarette Management Measures" and "E-Cigarette" national standards have also been released one after another. Identifying testing, product packaging and other supporting policies and implementation rules, coordinating relevant departments to study and formulate related policies such as warning signs, inspection and testing agencies, taxation, delivery, entry and carry, etc., and establish and improve supporting policy systems.


From a policy perspective, some experts believe that the future "taxation" of e-cigarettes should be within expectations. And how much tax is payable? Who should be charged? Such issues have been hotly debated in the industry.


Some voices believe that one of the characteristics of cigarettes is heavy taxation. According to the cigarette consumption tax rate adjusted in June 2009, the tax rate of Class A cigarettes is 56%, and the tax rate of Class B cigarettes is 36%. When electronic cigarettes are included in cigarette standard management , the increase in the tax rate may bring about a significant increase in the price of terminal electronic cigarette products.


There are also views that in the future, e-cigarettes will be included in the supervision and unified monopoly management will be implemented, and the collection of consumption tax may also be in the front-end link and will not fall into the retail terminal link.


Stores: Adjust sales strategies according to market supply and demand


In response to news related to taxation in the industry, the research group has learned from a number of leading e-cigarette companies. The latter said that they have not received official news or policy documents on tax changes recently. The company is currently in accordance with policy requirements and steadily promoting national standard products. development and inspection work.


Previously, affected by market speculation on e-cigarette flavors and tax standards, in the first quarter of this year, the e-cigarette sales market ushered in a wave of "stocking up". However, the research team visited a number of stores in Shenzhen and learned that the current overall supply of electronic cigarette sales is sufficient, but it failed to continue the sales boom in the first quarter. An e-cigarette shop owner in Shenzhen told the research team that in March, affected by policy-determining factors, users frantically stocked up. However, in the following months, store sales still fell back to the level of previous years.


"On the one hand, it is the impact of the general environment and weak consumer demand. On the other hand, the overall sales of e-cigarette stores are not optimistic due to the adjustment of the business model according to official policy documents. Especially before the implementation of policies and national standard products, the stores can only be seen on foot. Step ', adjust the sales strategy according to the market supply and demand." The owner said.


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