Citibank: New E-cigarette Tax may Reflect Well on Tobacco Giants

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Mar.08.2024

Citibank: New E-cigarette Tax may Reflect Well on Tobacco Giants

Citi analyst predicts positive growth for British American Tobacco and Imperial Brands with new e-cigarette tax proposed in UK budget.

According to a report from the UK financial website Proactiveinvestors, analysts at Citibank have noted that the UK government has proposed a new consumer tax on e-cigarette products in its recent budget. This development has created optimism for British American Tobacco (BAT) and Imperial Brands (IMB) for potential growth opportunities.

In his spring budget speech, British Chancellor Jeremy Hunt confirmed that starting in October 2026, e-cigarette products will become the main focus of a new tax. This move aims to maintain economic incentives for choosing e-cigarettes over smoking, while also increasing tobacco taxes.

This tax framework will be based on nicotine content and will use a three-tier system. In addition to the existing 20% value-added tax, fees will also be levied in the range of 1-3 pounds per 10 milliliters.

This structured approach aims to more deeply regulate the e-cigarette market, in coordination with the government's health strategy, to provide a less harmful alternative to traditional smoking.

Citibank wrote in a brief research report: "While the confirmation of plans to tax e-cigarettes is not surprising, we believe that the combination of this with plans to ban disposable e-cigarettes is having a positive impact on regulatory risks and returns for British American Tobacco and Imperial Brands."

References:

[1] Imperial Tobacco, BAT: Vape tax positive for tobacco giants, says US bank

Also Read:

[1] UK Plans to Implement Additional Tax on E-Cigarettes in 2026

[2] UK E-cigarette Tax Plan Supported by BAT CEO

[3] Potential Impacts of Proposed E-cigarette Tax in UK

[4] Virginia State Legislation Proposes New E-cigarette Regulations and Taxes

[5] UK Government Considering Tobacco Tax Increase, Raising Cost of a Pack to £16

#Europe #Legislation #E-liquids #United Kingdom #E-cigarette Taxes #E-cigarette #E-cigarettes and Tobacco

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