Electronic Cigarette Consumption Tax officially Inplemented, Electronic Cigarette Supervision Is on Par with Traditional Cigarettes

E-cigarette Regulation Is on Par with Traditional Cigarettes

“The taxation regulations introduced this time are actually based on the ad valorem rate-setting method for electronic cigarettes to calculate and pay taxes, that is, the tax rate for the production (import) link is 36%, and the tax rate for the wholesale link is 11%.” An industry insider said , the consumption tax of electronic cigarettes is taxed with reference to Class B cigarettes, but the “specific taxation” part is reduced. “At present, it can be said that the tax burden of cigarettes is slightly lower than that of Class B cigarettes, which is also in line with international market practices. The tax standard of electronic cigarettes is lower than that of traditional cigarettes.”

“From the perspective of the industry, the introduction of taxation rules is a good thing.” Ao Weinuo, secretary general of the Electronic Cigarette Professional Committee of the China Electronic Chamber of Commerce, said that electronic cigarettes are classified as new types of tobacco, and they are included in the unified management of the State Tobacco Monopoly Administration, which is conducive to electronic cigarettes. Tobacco industry develops healthily. “The industry association has done a lot of research before, and the current domestic tax standards are within the range that enterprises can afford.”

The E-cigarette Industry Bids Farewell to The Era of Huge Profits

The “Announcement” stated that according to the provisions of Article 17 of the “Implementation Rules of the Provisional Regulations of the People’s Republic of China on Consumption Tax” and the actual situation of production and operation, the national average cost and profit margin of electronic cigarettes is tentatively set at 10%, and the profit margin of electronic cigarettes in the future. bound to be compressed.

“The taxation has brought the industry’s overall profit margin back to normal and raised the industry’s entry barriers.” Analysts at Guosheng Securities believe that leading companies in the industry can rely on multiple advantages such as scale, automation, and strong bargaining power to smooth the impact of the tax increase. Small and medium-sized manufacturers may Accelerate the clearing, and the market concentration will be further improved.