New E-Cigarette Tax in Canada Starting 2022
Recently, a Canadian electronic cigarette retailer named Cold Turkey is warning its customers about the new federal consumption tax. Consumers will start experiencing the impact of this tax at the beginning of 2023.
It has been reported that tobacco and cannabis products sold in Canada come with a consumer tax stamp. Now, e-cigarette liquid will also have the same imprint. This means customers will need to pay additional taxes on e-cigarette liquid containing nicotine.
The consumption tax applies to all electronic cigarette liquid manufactured or imported into Canada, but does not apply to any electronic devices without electronic cigarette liquid, such as replacement coils or chargers.
The consumption tax on electronic cigarette liquid will come into effect on October 1st, 2022. All electronic cigarette liquid produced after this date will bear a new label.
The tax rate is determined by milliliters. The new tax rates are as follows:
Every 30 milliliters costs 7 Canadian dollars (approximately 37 Chinese yuan).
Every 60 milliliters cost 10 Canadian dollars (approximately 53 yuan in Chinese currency).
Every 120 milliliters costs 16 Canadian dollars (equivalent to approximately 84 Chinese yuan).
In addition to federal taxes, provinces also have the option to levy their own taxes. The rates will vary depending on each province and territory.
All new products are subject to this tax. However, existing stocks can be sold at the price set before the tax decision. E-liquids produced before October 1, 2022, can be sold at the original price until January 1, 2023.
The increase in taxation on e-cigarette products is linked to an increase in cigarette usage. This has led many consumers to question whether vaping is still a cheaper alternative to smoking. However, current data suggests that for the majority of consumers, even after factoring in the new taxes, e-cigarettes remain more affordable than smoking. The cost of one pack of cigarettes exceeds the cost of one bottle of e-liquid.
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