Category: Taxation

New Tender for Tobacco Stamps

Photo: Taco Tuinstra
The Inland Revenue Department in Nepal has invited a fresh global tender for excise duty stickers for tobacco and alcohol products, reports The Kathmandu Post. A tender notice was issued on Oct. 14, and all participants must submit their bids by Nov. 29.
There has been a shortage of excise duty stickers in Nepal since the Indonesian supplier that was selected to supply them did not show up to sign the contract. The second-best bidder, a company from Lithuania, was not offered the contract due to “issues” with the company.
The company has moved to the Supreme Court, arguing that the law states the second bidder should be awarded the contract if the highest bidder does not sign the contract.
“Although the case is still pending in the court, it didn’t stop us from moving forward to call a fresh tender,” said Mukti Pandey, deputy director general at the Inland Revenue Department.
October 23, 2020
Poll: Irish ‘Understand’ Black Market Purchases

Photo: Tobacco Reporter archive
An overwhelming majority of adults in Ireland think that purchasing cigarettes and tobacco from the black market or other countries is “understandable” given the high cost of tobacco sold legally domestically.
According to a survey conducted by iReach for the smokers’ group Forest Ireland, 70 percent of adults agree that it is “somewhat understandable” (40 percent) or “very understandable” (30 percent) that smokers might choose not to buy cigarettes and tobacco from legitimate retailers in Ireland.
That view was supported by 85 percent of smokers and two-thirds (67 percent) of non-smokers. Only one in five (20 percent) of all adults found it not understandable.
The survey, which was conducted Sept. 24-30, also found that 65 percent of adults think the current level of tobacco duty—almost 80 percent on an average pack of cigarettes in Ireland—is either too high (22 percent), a little high (11 percent) or about right (32 percent).
Only one in four (25 percent) think tobacco duty is too low (21 percent) or a little low (4 percent).
Forest Ireland is urging the government to reject calls to increase the tax on tobacco. In its submission ahead of next week’s Budget, the group called on Finance Minister Paschal Donohoe to “give smokers a break.”
“A further tax hike will encourage even more smokers to buy tobacco abroad or on the black market because there is very little stigma associated with such transactions,” said Forest Ireland spokesman John Mallon.

October 8, 2020
South Korea to Double Liquid Taxes

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The government of South Korea will double taxes on e-liquids in 2021.
The “health promotion tax” on nicotine solutions will be raised from the current KRW525 ($0.45) to KRW1,050 a milliliter, according to a story in The Korea Herald.
Ministry of Health and Welfare officials said the revisions are intended to achieve a fairer taxation on varying types of tobacco products. Currently, the tax rate for e-cigarettes is only 43 percent of that for conventional cigarettes.
The ministry has also warned against the use of e-cigarettes or vaping products, citing global instances of lung injuries associated with their use.
September 23, 2020
Britain Ups Personal Allowance for Tobacco

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British passengers traveling to EU countries will be able to take advantage of duty-free shopping from January 2021, according to HM Treasury.
This means that passengers will be able to buy duty-free alcohol and tobacco products, where available, in British ports, airports, international train stations and aboard ships, trains and planes.
The amount that passengers can bring back with them from non-EU countries will also be significantly increased and extended to EU countries.
The new U.K. inbound personal allowances are 200 cigarettes or 100 cigarillos or 50 cigars or 250 grams of tobacco or 200 tobacco-heating sticks or any proportional combination of the above
Following its departure from the EU, the British government has been reevaluating import duties.
Health advocates criticized the new rules. “Anything that increases the availability of tobacco is a negative step for public health,” a spokesperson for the British Medical Association was quoted as saying by The Independent. “Each year there are nearly half a million hospital admissions in England because of smoking in England and nearly 80,000 deaths annually.”
September 17, 2020
Russia Mulls Tobacco Tax Hike to Boost Budget

Photo: Alexander Smagin
Russia wants to increase the excise tax on cigarettes by 20 percent next year to help plug holes in its budget, reports Reuters. The government is also eying the oil and mining industries for additional revenues.
The move, estimated to bring in around RUR340 billion ($4.54 billion) a year, comes as Russia faces a prolonged budget deficit amid weak oil prices and after Moscow offered Belarus a $1.5 billion loan.
“When it is difficult, everyone should be involved in solving the problems which the country and its people are facing,” Prime Minister Mikhail Mishustin told a government meeting on Wednesday.
He described the proposal, yet to be finalized, as “slightly increasing taxes on a number of profitable sectors.”
September 17, 2020
UKVIA Wants Tax Parity With NRTs for Vapor

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The U.K. Vaping Industry Association (UKVIA) is calling on the U.K. government to treat vapor products as nicotine replacement therapies (NRT) when calculating value-added tax (VAT).
The call comes amid reports that the Chancellor of the Exchequer considering reducing the VAT rates to stimulate the economy in the wake of the coronavirus.
In a letter to the Chancellor of the Exchequer, the UKVIA urges the government to consider a level playing field for NRT and vapor products to help adult smokers who would otherwise not quit smoking switch to vaping.
The letter points to the recent Public Health England report that found that when vapor products were used to quit, either alone or with licensed medication, success rates were comparable to, or higher than, when using NRTs alone.
John Dunne, director at UKVIA, said the vapor sector has been a major retail success story this century and is playing a major role in getting smokers to quit, thereby helping cut the annual cost of healthcare associated with smoking.
“Yet according to research nearly one in 10 smokers do not switch to e-cigarettes because they considered them to cost too much,” he said. “Ensuring that the price of vaping products remains much lower than cigarettes is vitally important in continuing to encourage the some 7 million smokers in the U.K., who otherwise do not quit, to make the switch.”
July 5, 2020
Georgia Likely to Tax Vapor Products

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Georgia’s General Assembly passed a measure Friday to authorize the taxation of vapor products, reports the Athens Banner-Herald. The bill also raises the U.S. state’s minimum age to vape or smoke cigarettes from 18 to 21.
The measure slaps a 7 percent excise tax on vaping products such as e-cigarettes, vape pens, refillable cartridges and electric hookahs.
The vaping tax was added to a separate bill that raises the minimum age to use tobacco and vape products to 21. The bill passed by a 45-8 vote in the Senate Friday after the state House passed it by a 123-33 vote on Thursday. It now heads to Governor Brian Kemp for his signature.
Vapor product manufacturers and vape store owners had opposed the excise tax and new licensing rules, arguing higher prices on vaping could drive smokers back to cigarettes after using the tobacco-less products to kick the habit.
June 29, 2020
VAT Reduction to Include Tobacco

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Germany will reduce its value-added tax (VAT) by three percentage points to 16 percent from July 1 until the end of 2020 as part of a massive stimulus package designed to offset the economic impact of the coronavirus pandemic.
While the VAT reduction will reportedly also apply to tobacco products, it remains unclear to what extent smokers will benefit from lower prices.
Tobacco companies will be able to pass on the discounted tax to consumers at the earliest in two to three months—assuming they want to do so at all.
This is because new prices require tobacco companies to purchase new tax stamps, the delivery of which takes about eight weeks. The manufacturers will also have to apply for new barcodes and print them on their products, which can take between two and three months, depending on the company’s resources.
According to experts, it is unlikely that dealers will be given new tax stamps for cigarettes that have already been produced and packaged.
June 24, 2020
Estonia Mulls End to E-Liquid Taxes

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Lawmakers have submitted a bill to Estonia’s Parliament that would stop the collection of excise duty on tobacco e-liquids for two years.
The legislators hope the measure will help to control the border trade and black market.
In the draft explanation, the bill’s authors note that stopping the collection of excise duty will give entrepreneurs an opportunity to cut the price of e-liquids and encourage the sale of legal products.
If passed, the legislation will enter into force on Dec. 1, 2020.
June 8, 2020
Hungary Wins EU Tax Fight

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Hungary has won its fight at the European Union’s top court to topple part of an EU decision to stall the government’s progressive taxes on retailers and tobacco companies, reports Bloomberg.
The EU Court of Justice in Luxembourg on Thursday backed Hungary’s appeal and annulled the European Commission’s 2015 decision to order the suspension of the system.
The commission in 2015 opened a probe into the measure and temporarily barred the nation from collecting special taxes from retailers and tobacco companies on suspicion the “steeply” progressive levies violated EU rules.
June 5, 2020