The UK will announce a tax on vape products on March 6th.
According to the British Guardian, British Finance Minister Jeremy Hunt is expected to announce a “Vape product tax” on E-liquid manufacturers and importers when he announces the government budget on March 6. Products with higher nicotine content The higher the tax will be levied.
The UK’s tax policy will be similar to the tax plans of 15 European countries, including Germany – a tax of 1.60 euros per 10ml of E-liquid, and Italy – a tax of 1.30 euros. The tax rate that the UK will implement is temporarily unknown. Nicotine Vape products with higher content also have higher tax rates. This move aims to reduce the appeal of vape use and smoking.
In Europe, many countries already tax Vape, and the European Commission is also planning to introduce the lowest tax level for Vape across the EU.
Vape tax will generate over £500m in UK tax revenue
In addition, the UK is also preparing to raise cigarette taxes in a one-off move to ensure vaping remains a cheaper alternative, according to The Times. The current average price of a pack of cigarettes (containing 20 cigarettes) in the UK is 14.39 pounds. After the tax rate is increased, the average price will reach 16 pounds a pack. In Germany, the average price of the same cigarettes is only 6.5 pounds.
A month earlier, the British government announced plans to ban single-use vapes nationwide, while also limiting the flavors and packaging of vapes. Preliminary analysis from the Treasury shows that the new Vape tax plus the upgraded tobacco tax are expected to bring more than 500 million pounds in tax revenue to the UK each year by 2028 to 2029.
John Dunn, director general of the British Vape Industry Association, expressed opposition to the increase in Vape tax. He said: “Increasing Vape tax will make it more difficult to obtain Vape for the most vulnerable people in society, who have the highest smoking rates and are most in need of effective smoking cessation tools. In addition, A 2022 report from the Center for Economics and Business Research found that smokers switching to vaping saved the NHS £322 million, a figure expected to more than double if 50% of UK smokers switched to vaping. “
John Dunn also said: “Restricting the use of Vape not only means more smokers, but also means more illegal and unregulated Vape entering the British market. What we really need the government to do is to retail Vape We need to encourage businesses to issue licenses and properly enforce laws prohibiting youth use of vapes before it is too late.”
Figures from the Office for National Statistics in September last year showed that 4.5 million people in the UK use Vape, or 8.7% of the adult population, up from 7.7% in 2021, with a marked rise in use among 16 to 24-year- olds in particular.
The move hit British tobacco stocks, with the FTSE 100 index falling slightly by 1.28 points on the day. Imperial Brand Group’s stock price fell about 5% from the previous day, because it is the largest tobacco company and will bear the brunt.
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