Vape Taxation on a Global Scale

As regulations continue to evolve, shift, and mutate, one of the most important aspects for consumers and manufacturers alike is how taxation will look after the dust settles. Vape taxes in the U.S. vary widely depending on which state you reside in, and legislation regarding vape tax never seems to be stagnant.

However:

Recent developments around the world, specifically in Israel and Malaysia, may give us some insight into where the global market is headed in terms of taxes.

Pending a Decision for World’s Highest Vape Tax

Soon a committee of the Israeli mirror image of parliament in the U.S. will decide if the ‘world’s highest vape tax’ proposed by the Israeli finance ministry will pass or not. The wholesale tax of 270%  and 11.39 Israeli Shekels per milliliter on e-liquid is already in effect on paper, but it must still be approved by the finance committee.

The committee is expected to vote on the tax this week and thereby decide on a key element that could shape the future of the vape industry in Israel. If approved, this allows us to draw the conclusion that worldwide legality is probably heading in the direction of delivering comparable taxes between vaping products and cigarettes, which is why the result of this week’s vote in Israel is so important.

Another point of view says that a tax like this one would destroy any country’s legal market, which means that vape purchases will likely shift to the black market while other vapers will return to smoking tobacco. A lose-lose sort of situation.

Malaysia Postpones Massive Vape Tax

In somewhat more positive news, the Malaysian government has actually listened to consumer complaints in a similarly high proposed tax on nicotine e-liquid and has temporarily postponed the enforcement of a plan that would triple the tax, even on e-liquid with zero nicotine content.

As is common, the announcement of the postponement comes without a reason for the delay. So it could be due to a successful lobbying effort or just a delay in legislation which is also not uncommon.

However:

There are statements coming from Malaysian vape advocates that have given importance to the strength that black market vape products would gain with a decision like this one where vape products would end up being more expensive than tobacco cigarettes in the country.

Vape bans are not uncommon in Southeast Asia. In fact, Malaysia is currently one of the few countries in the continent contemplating the possibility of getting rid of its vape ban. Eliminating this prohibition to regulate nicotine vaping would set a precedent for other countries in the continent and also around the world.