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Electronic cigarette consumption tax landing: short -term affecting industry profitability, long -term beneficial concentration increase

Electronic cigarette consumption tax landing: short -term affecting industry profitability, long -term beneficial concentration increase

2022-10-31

On October 28, Dongxing Securities released a research report in the light industry manufacturing industry, which pointed out that consumption tax landing, short -term affecting the industry's profit, and long -term concentration increased.




The specific content of the report is as follows:


Event: On October 26, the Ministry of Finance, the General Administration of Customs, and the General Administration of Taxation jointly issued the "Announcement on the Consumption Tax of Electronic Cigarettes", incorporating electronic cigarettes (including products sold by cigarette bombs, smoke and soldiers) into the scope of consumption tax collection scope The tax rate is calculated from the price rate. Among them, the tax rate of the production (import) link is 36%, the tax rate of the wholesale link is 11%, and the export electronic cigarettes are appropriate to export refund (exemption) tax policies. The announcement was officially implemented on November 1.


The taxation policy for electronic cigarettes has been launched, and the export tax refund policy remains unchanged. Previously, my country had levied consumption tax on traditional cigarettes, levied the price tax (tax rate 56%/36%) and the amount tax (both 0.003 yuan/branch) on the production link according to category A/B cigarette cigarettes. From price and tax (tax rate 11%) and consuming tax (0.005 yuan/support). The issuance of electronic cigarette consumption tax policies this time is slightly lower than cigarette cigarettes in the tax burden (not levied from tax), which not only makes up for the vacancy of the electronic cigarettes to cigarettes, in line with the orientation of the overall control of tobacco consumption, but also benefits electronics electronics Cigarettes are the healthy development of cigarette replacement products. At the same time, electronic cigarette export tax exemption policies remain unchanged, which is conducive to domestic enterprises to expand overseas markets.


The retail price may rise, while the industrial chain bears partial tax burden. On the one hand, manufacturers and brands are more difficult to do not do prices and bear their own tax burden. Assuming that the manufacturer of each smoke ammunition is 9 yuan and 15 yuan (including value -added tax), the consumption tax of 4.78 yuan is 9 yuan and 15 yuan (including value -added tax), respectively; The operating profit margin of manufacturers and brands will decline to reach 30 or 18 percentage points. On the other hand, there are also difficult retail prices. The brand owner increases the shipping price, the session of the wholesale link is taxed, and the retailer will also increase the price when the profit margin is under pressure; however, the rise in retail prices will affect consumers' purchase preferences. In the case of pioneering markets, significant price increases are not conducive to long -term development. Taken together, we expect that manufacturers and brand companies will bear part of the tax burden, and conduct part of the tax burden through price increase; the specific degree of responsibility depends on their respective bargaining capabilities and bearing capabilities. Factors such as brand power.


In the middle and long term, consumption taxes are conducive to the increase in industry concentration. Considering the consumption tax may reduce the overall profit margin of the electronic cigarette manufacturing side and the brand side, and then the difficulty of increasing the market share of electronic cigarette companies through the price reduction, large promotion, and increased marketing power can increase. Business may gradually clear; relying on technology, manufacturing, product advantages, and brand awareness companies with strong profitability, the competitive advantage will be further prominent. In the long run, leading enterprises are expected to gradually digest the impact of consumption tax and boost profitability. After the establishment of a solid product and brand advantage, the head brands are expected to appropriately raise prices or enjoy the upstream cost reduction, or develop mid -to -high -end product lines and continue to launch new products to enhance the product premium; head manufacturers are expected to rely on automated manufacturing and scale manufacturing , Technological innovation and other methods to reduce costs and benefit.


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