Problems For Ecig Taxation
Vapers have long suspected the primary motivation for ecig control is revenue generation. Voices are speaking out about potential problems.
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by Dave Cross
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Back in December we covered the ramifications of the Italian and Portuguese tax hike on eliquids. “Research by The Institute of Economic Affairs (IEA) highlights how this impacts harshest on those with the lowest incomes,” we wrote, “the same people making up the bulk of current smokers who would benefit from a vaping alternative.”
Tax-based price rises have had an inevitable consequence in addition to driving down smoking rates. In Australia, The Australian reports that illegal importation of tobacco products has robbed their government of an estimated Au$1.35 billion. Under the counter baccy is now estimated to account for 14.5% of all products used. “We believe the government’s excessive tobacco regulations are providing incentives for the black market,” predictably said a representative of Phillip Morris.
As soon as UK vaping taxation was mentioned vapers immediately began to talk about stocking up on nicotine and how they’d shop outside of the European Union. The theme of importing heavily taxed products features in a Press of Atlantic City opinion feature. Ben Fogletto writes: “New Jersey, which collects $2.70 for each pack of cigarettes sold, has seen the writing on the wall and already made one attempt to put such a tax on e-cigarettes.”
In pointing out the ease of cross-border transport of cheaper goods, Ben adds: “In New York, which tries to collect $4.35 for every pack smoked, 58 percent of all the bulky, hard-to-hide tobacco cigarettes are smuggled into the city to avoid the tax.” Without a uniform tax across the entire European Union crafty customers will buy cheaper products and enterprising vendors will reassign the home of their website.
Avoiding local purchase taxes is an activity already carried out by most purchasing directly from China and, as Fogeletto adds: “taxing e-cigarettes effectively is also simply impossible because smuggling vaping liquids would be incredibly easy.”
Regulation and taxation is something that is also confusing those opposed to vaping. A new 46% purchase tax in Vermont (hoping to raise just a quarter of million dollars) doesn’t carry the support of Governor Peter Shumlin. “The jury is still out on e-cigarettes,” said Shumlin. “The question is, are they bad for you or do they actually allow folks to get off of cigarettes and move to these e-cigs? So I think we should be cautious moving forward about taxing something new that we are still trying to figure out.”
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Meanwhile, in Canada, the Manitoba government income has dipped as tobacco tax revenues fell 12% due to electronic cigarette use. Barry Draward, the assistant deputy minister of finance, explained that stop-smoking products are exempt from taxation...but “If [ecigs are] a cigarette replacement, then, in my opinion, we've got to tax it.”
Dave Cross
Journalist at POTVDave is a freelance writer; with articles on music, motorbikes, football, pop-science, vaping and tobacco harm reduction in Sounds, Melody Maker, UBG, AWoL, Bike, When Saturday Comes, Vape News Magazine, and syndicated across the Johnston Press group. He was published in an anthology of “Greatest Football Writing”, but still believes this was a mistake. Dave contributes sketches to comedy shows and used to co-host a radio sketch show. He’s worked with numerous start-ups to develop content for their websites.
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