Commenting on reports that the
Chancellor is considering a tax on e-cigarette liquid in the
upcoming budget, Christopher Snowdon, Head of Lifestyle Economics
at the free market think tank, the Institute of Economic Affairs,
said:
"The government’s approach to vaping has become an incoherent
mess. It says it wants to clamp down on disposable vapes and yet
it is going to tax refillable e-cigarette liquid. It is giving
away e-cigarettes for free with its Swap to Stop scheme while
making vaping less affordable for those who are prepared to pay.
It says it wants to lower the tax burden but seems happy to tax
smoking cessation.
"We know what happens when e-cigarettes are taxed. The evidence
from other countries shows that it leads to more cigarette sales
and more smoking.* When you have two substitute products,
discouraging the use of one amounts to encouraging the use of the
other. Anti-vaping policies are essentially pro-smoking
policies."
ENDS
Notes to Editors
- *Cotti et al. (2020)
studied e-cigarette taxes in eight US states and found that a
decline in e-cigarette pod sales led to an increase in the sale
of traditional cigarettes.
-
Pesko et al. (2020) found
that “higher e-cigarette tax rates increase traditional
cigarette use” and predicted that an e-cigarette tax of US$1.65
per ml would increase the number of daily smokers by 1%.
-
Saffer et al. (2019)
concluded that a large tax on e-cigarettes in Minnesota
prevented 32,400 smokers from quitting.
