Northern Ireland to be included in UK Tobacco and Vapes Bill
March 6, 2024
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March 8, 2024
British American Tobacco CEO Tadeu Marroco supports the UK’s plan to impose a vape tax. He claims that tobacco manufacturers have learned to “love regulation”.
“I think this could be a good idea, I believe we need more regulation.”
A new tax policy on vapes to reduce youth smoking rates.
UK Chancellor of the Exchequer Jeremy Hunt unveiled a new tax policy on vapes in the spring budget on Wednesday. It aims to reduce youth smoking rates. According to officials from the British Treasury, the new tax rates will vary according to the nicotine content of vapes. And, the increase in tobacco taxes will be more weighted on cigarettes. So as to ensure that the 4.7 million vape users in the UK are not incentivized to return to smoking.
Marrocco says a vape tax would give the government greater control over the industry. Besides, he notes that illegal products account for 1/3 of the UK vape market, it could take market share away from BAT.
BAT’s Vuse vape products are facing stiff competition from Chinese vape brands in attracting UK vapers. Such as Elf Bar and Lost Mary.
British American Tobacco (BAT)
This year, the UK government has announced plans to ban disposable vapes and restrict vape flavors.
It is believed to be the cause of a sharp rise in underage vaping. The ban is expected to take effect in April 2025.
Marrocco says he hopes to introduce a “modest” vape tax, adding that the tax “needs to be consistent with the continuum of risks”. So “cigarettes are taxed more and vapes are taxed much less”. The company’s rival Imperial Tobacco also supports the vape tax plan.
According to the tax proposals, the Chancellor will announce a three-tier vape tax – making it illegal for under-18s to buy vapes. So, the tax measure may not be implemented until October 2026 to allow time for policy consultations.
Finally, the plan also mentions that non-nicotine vape oil will be taxed at £1 per 10ml. And, e-liquid with a nicotine content equal to a cigarette or less will face a tax rate of £2 per 10ml. While vapes with more than one cigarette will be taxed at £3 per 10ml.
Currently, vaping products are already subject to a 20% VAT rate. While medicines designed to deter people from smoking are subject to a lower VAT rate of 5%. According to people familiar with the matter, the chancellor is also expected to increase tobacco taxes for the second time in half a year. But, in the autumn statement last November, Hunt raised taxes on all tobacco products by 2% points. This is above the retail price index.
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Northern Ireland to be included in UK Tobacco and Vapes Bill
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