Vaping and tax
Vaping and Taxation
Independent studies show that price is an important factor in encouraging adult smokers to transition towards vaping, and that demand is more responsive to price than cigarettes. We believe if we aren’t able to deliver a strong value proposition to those adult smokers who are price conscious, it will be impossible to encourage them to transition away from cigarettes. Regulatory and excise tax regimes for vaping products should recognise that they are completely different from tobacco products, and we urge regulators to resist the temptation to treat the vaping category as a ‘cash cow’ revenue generator to plug budgetary shortfalls.
Applying excise taxes to vaping products makes them more expensive. This in turn makes vape products less appealing to cost-conscious adult smokers who are looking for a reduced risk alternative to traditional tobacco products. Vapes do not contain tobacco, so it is confusing to conflate them with traditional tobacco products. Perhaps most importantly, health bodies around the world increasingly acknowledge that vaping provides significant potential for reduced harm if smokers transition from cigarettes, so that transition should be encouraged by an appropriate tax regime. For the category to continue to meet consumer needs, it is essential that excise levels remain low when compared to cigarettes.