UK Government Considers New Tax on Vaping Products

Mar.01.2023
UK Government Considers New Tax on Vaping Products
UK government considers taxing e-cigarettes to combat underage use, but also faces calls to lower VAT on them.

According to a recent report by UK media outlet Politico, the government is considering implementing a new tax on e-cigarette products to address the issue of disposable e-cigarettes becoming popular among minors in the country. While the government currently recognizes e-cigarettes as a helpful tool for quitting smoking, they may also require stricter packaging and marketing requirements, as well as limits on flavors. However, a full ban on disposable e-cigarettes is unlikely.


In 2022, a report assessing whether England can become a smoke-free region before 2030 has caused widespread concern in the UK. It is understood that certain specific regulations in the proposal are aimed at addressing the issues identified in the report.


In order to prevent underage smoking, the United Kingdom has implemented several comprehensive measures. According to a spokesperson from the UK Department of Health and Social Care, these measures include laws restricting sales to those under 18, limiting nicotine content and pod size, requiring specific labeling, and placing restrictions on advertising, all aimed at protecting children from the influence of electronic cigarettes. Advertising of e-cigarettes and their components is prohibited from any elements that may attract those under 18, such as well-known characters or celebrities.


Last week, England's Chief Medical Officer, Chris Whitty, told a parliamentary committee that marketing electronic cigarettes to children could have "unknown consequences for intellectual development" and called the targeting "shocking." He warned that the proportion of children using e-cigarettes has doubled in recent years. This has heightened societal concern over the issue, prompting the UK government to provide solutions in the short term.


On the other hand, there is a call within the UK to lower the value-added tax (VAT) on electronic cigarette products. In 2022, the Local Government Association (LGA) urged the British government to lower the VAT on e-cigarettes from 20% (which categorizes e-cigarettes under traditional tobacco regulation) to 5%, aligning it with the tax rate for conventional nicotine replacement therapies (NRT) such as gum and patches. The LGA, representing councils in England and Wales, stated that the current 5% tax rate only applies to "medicinal products intended to help people stop smoking." The association added that given the existing scientific evidence, e-cigarettes do indeed help people quit smoking and should therefore qualify for the 5% tax rate.


According to reports, the UK government has announced plans to make England a "smoke-free zone" by 2030. Scotland aims to achieve this goal by 2034, while Northern Ireland and Wales, both also part of the UK, have yet to set a firm date.


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Related Reading:


The UK Action on Smoking and Health organization acknowledges the harm reduction effect of electronic cigarettes but recommends a £4 per unit consumption tax be imposed.


Reference:


The United Kingdom is deliberating on implementing a potential tax on vaping products.


The Khan review aims to render smoking obsolete.


The United Kingdom is considering implementing a new tax on vaping products. The proposed tax is currently being debated by lawmakers.


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