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New Vape Tax is set to hike the price of vaping supplies on par with cigarettes.

In the recent weeks, the EU parliament has debated to see vaping products fall under the same tax category as tobacco products, the representative committee has voted to give this new law a go ahead.

The proposal entails classifying vaping and heated tobacco products under the category of the EU Tobacco Excise Directive. A document which was leaked by Euractiv last week describes the directive currently encompassing vaping and heated tobacco products as “less effective” and ‘no longer sufficient”. The representative committee claims that the current directive was too narrow to include a new generation of products, namely e-cigarettes and e-liquids.

According to the leaked document, the legislative body believes that it’s urgent and necessary to upgrade the EU regulatory framework in order to tackle the current and future challenges “for the functioning of the internal market by harmonising definitions and tax treatment of novel products such as liquids for e-cigarettes and heated tobacco products” The aforementioned statement takes into account both products that contain or do not contain nicotine in order to avoid any legal and regulatory uncertainty.

The document references a study from 2017 which found that the demand for e-cigarettes is price sensitive, if an additional tax rate was introduced, the use of e-cigarettes would drop resulting in a modest revenue gain from the tax scheme. The study highlighted the administrative cost of introducing the tax as well as the additional financial burden for local businesses, the study estimated an annual cost increase of 15.000. The leaked document discusses the practical difficulties in production and movement of non-taxed e-liquids, describing them as very difficult to control.

The representative committee has suggested a lighter approach to be introduced, one without a harmonised tax category or a mandatory minimum tax rate, leaving all member states to deceive what is best for them. This approach would seem as a good compromise between expanding the directive and allowing for moderate administrative and compliance costs.

The move to create a EU wide legislation comes as a result of a string of failures to implement similar legislation on the national level. A number of countries tried to implement a wider nicotine product or tobacco alternative tax scheme only to be faced with legal disputes. 

As the EU is moving to “modernise” the tobacco legislation across the EU, we struggle to find positive aspects of the said modernisation apart from the obvious cash grab this entire charade appears to be. If put into motion, the legislation will force new vapers back into smoking as the legislation will increase the cost of vaping pushing it closer into the realm of smoking.

The only upside of this development is the lack of the UK's involvement in it. If implemented, vapers in the UK will have access to cheaper vaping products compared to customer’s in the EU. The legislation also faces the possibility of creating a black market, forcing vapers with financial challenges to pursue potentially unsafe sources of vaping supplies which in the end, like the proposed legislation will cause more harm than good.