On November 1, the production (import) of electronic cigarettes will be subject to a 36% consumption tax

  Electronic cigarette press the slow forward button?

  Tobacco control experts: It will play a certain role in tobacco control, but is cautiously optimistic about the effect

  On October 25, the Ministry of Finance, the General Administration of Customs, and the State Administration of Taxation jointly issued the "Announcement on the Collection of Consumption Tax on Electronic Cigarettes" (hereinafter referred to as the "Announcement"), which included electronic cigarettes in the scope of consumption tax collection, and clarified that electronic cigarettes are subject to ad valorem rates. The method calculates the tax, the tax rate for the production (import) link is 36%, and the tax rate for the wholesale link is 11%, and it will be implemented from November 1.

  On October 26, a relevant person in charge of the e-cigarette industry told reporters that the industry is actually ready to be levied consumption tax, and this "boot landing" meets expectations in terms of consumption tax collection standards.

Tobacco control experts said that the collection of e-cigarette consumption tax will play a certain role in tobacco control, but they are cautiously optimistic about the effect of tobacco control.

  Electronic cigarettes are subject to consumption tax of 36% for production (import) and 11% for wholesale

  Electronic cigarettes refer to electronic transmission systems used to generate aerosols for people to smoke, including pods, smoking sets, and electronic cigarette products sold in combination with pods and smoking sets.

  Compared with traditional cigarettes, although many people think that e-cigarettes are relatively less harmful, they are not harmless to health.

  According to the announcement of the Ministry of Finance, the General Administration of Customs, and the State Administration of Taxation, e-cigarettes are included in the scope of consumption tax collection, and e-cigarettes are added under the tobacco tax item.

The reporter saw that the tax rate on electronic cigarettes this time is 36% for the production (import) link and 11% for the wholesale link.

  According to the announcement, consumption tax taxpayers refer to units and individuals that produce (import) and wholesale electronic cigarettes within the territory of the People's Republic of China.

Taxpayers in the production of electronic cigarettes refer to enterprises that have obtained licenses for tobacco monopoly production enterprises, and have obtained or licensed to use the registered trademarks of electronic cigarette products of others.

If electronic cigarettes are produced through OEM, the enterprise holding the trademark shall pay the consumption tax.

The taxpayer of electronic cigarette wholesale refers to the enterprise that has obtained the license of tobacco monopoly wholesale enterprise and operates the wholesale business of electronic cigarette.

Taxpayers in the import of electronic cigarettes refer to units and individuals who import electronic cigarettes.


  Be mentally prepared for consumption tax

  On October 26, Mr. Huo, who runs an e-cigarette store in Changping, Beijing, told reporters that he had been operating e-cigarettes here for more than 4 years, and he had already paid attention to the news of taxation on e-cigarettes on October 25.

When business was at its best in the early years, Mr. Huo could sell more than 20 e-cigarettes a day.

"Now only one or two are sold a day, and sometimes even one can't be sold."

  Talking about the reasons, Mr. Huo analyzed that when the electronic cigarette first appeared, the market was almost blank. Now the market is almost saturated, and there are many competitors, so the business is naturally not so good.

"The main part of sales now is pods, and pods are consumables, so there will always be a market."

  The reporter learned from an e-cigarette operator that in fact, many people are psychologically prepared for the taxation of e-cigarettes.

In August 2018, the State Administration for Market Regulation and the State Tobacco Monopoly Administration jointly issued the "Notice on Prohibiting the Sale of Electronic Cigarettes to Minors"; Electronic Cigarette Infringement Notice"; On November 10, 2021, the State Council revised the "Regulations on the Implementation of the Tobacco Monopoly Law of the People's Republic of China", clarifying that electronic cigarettes are under the management of the Tobacco Monopoly Bureau, and characterizing electronic cigarettes as a new type of tobacco products; plus this year On May 1, the "Measures for the Administration of Electronic Cigarettes" was implemented, and everyone has felt that the "tightening curse" on electronic cigarettes has become more and more tight.

  Price trend:

  Costs may rise after tax

  On October 26, a staff member of an electronic cigarette store in Sanlitun, Beijing told reporters that the current price of electronic cigarette sets sold in their store is 278 yuan, a box of 3 cartridges, and the total price is 99 yuan. The "Mandatory National Standard for Electronic Cigarettes", which was officially implemented today, stipulates that there are no fruit-flavored pods that were popular in the past, and only tobacco flavors remain. "One pod is equivalent to two and a half packs of traditional cigarettes."

  Regarding the price trend, the staff member said that it is not easy to judge.

"The price has not changed yet, but if the tax starts, it is estimated that the cost will still rise, so I am also considering whether to buy more goods."

  Expert opinion

  The release of taxation standards is conducive to the rational development of the electronic cigarette industry

  On October 26, Zhang Jianshu, president of the Beijing Tobacco Control Association, told reporters that the release of the taxation standard is conducive to the rational development of electronic cigarettes, but tobacco control is not only a method of taxation, so it is necessary to control whether electronic cigarettes can be controlled through taxation. Tobacco development is cautiously optimistic.

  "E-cigarettes are a new thing developed in China in the past ten years. Previously, the regulations and tobacco control measures were not unified, which also caused some chaos, but after a series of measures in recent years, the supervision of electronic cigarettes has been strengthened." Zhang Jianshu It is said that clarifying the taxation standard is also an effective way to control e-cigarettes, but more should rely on publicity and other methods to reduce the exposure of everyone, especially young people, to e-cigarettes.

  Zhang Jianshu told reporters that tobacco control is a systematic work, and electronic cigarettes and traditional cigarettes cannot be treated as double standards.

"For example, electronic cigarettes are now banned from selling fruit-flavored pods, but we see many traditional cigarettes with popping beads inside, which actually makes cigarettes tasteful, which is easy to attract people to smoke."

  On October 26, the staff of the Electronic Cigarette Industry Committee of the China Electronic Chamber of Commerce told the Red Star News reporter that the introduction of the consumption tax was actually in line with expectations and was good news for the industry.

In addition, the scope of consumption tax is only for products sold in China. The tax object is the production enterprise or brand enterprise. The specific tax products refer to the finished products of smoking sets and pods. Raw materials and supporting products such as nicotine and e-liquid do not need to be levied in this policy. The consumption tax involved, the exported electronic cigarette products are exempt from the consumption tax involved in this policy, and enjoy the original 13% tax rebate policy.

  The reporter noticed that in the announcement on the collection of consumption tax on e-cigarettes, the policy of tax rebates for e-cigarette exports was retained, saying that "taxpayers export e-cigarettes, and the export tax rebate (exemption) policy is applicable. The e-cigarettes are added to the border residents. There is no duty-free list for imported goods in the mutual market and taxes are levied according to regulations." (Chengdu Commercial Daily-Red Star News reporter Yang Yuqi Zhang Yanliang special correspondent Shui Ning)