Today, I saw a news that sparked attention. A country in Eastern Europe is raising the consumption tax on e-cigarettes, which is Latvia.
Latvia, located in the north of Lithuania, has recently made a decision to implement an electronic atomized consumption tax.
According to the Latvian News Network, starting from 2024, Latvia will gradually increase the consumption tax on alternative tobacco products such as e-cigarettes. And this revised bill received government support on October 9th.
(Raise taxes)
It is also noteworthy that Latvia's increase in the consumption tax on e-cigarettes is much higher than other products. Including HNB, cigarettes, alcohol, etc.
According to Latvia's regulations, starting from March 1, 2024, a three-year consumption tax increase phase will begin, gradually increasing the consumption tax on electronic cigarettes, cigarettes, cigars, and interchangeable goods. The consumption tax on the above-mentioned products will be adjusted on January 1st of each year in 2025 and 2026. The consumption tax plan for e-cigarettes and their components is expected to increase by an average of 21% annually, with a consumption tax of 0.35 euros per milliliter of tobacco oil by 2026. Currently, Germany charges an additional tobacco tax of 0.16 euros per milliliter for electronic cigarette oil. If the consumption tax per milliliter of tobacco oil in Latvia in the future reaches 0.35 euros, which is equivalent to a one-time consumption tax of 0.7 euros per 2ml (equivalent to 5-6 RMB)?
The collection of e-cigarettes includes these categories, such as liquids used in e-cigarette equipment, semi-finished liquid components used in e-cigarette equipment, etc.
Compared to the annual increase of 21% in electronic cigarettes, this country increases the consumption tax on cigarettes by an average of 5.6% each year, which will increase the price of each pack of cigarettes by approximately 0.14-0.2 euros. At present, the consumption tax per gram of tobacco for local cigarettes is approximately 0.14 euros. The consumption tax per gram of tobacco is 0.02 euros, the consumption tax on tobacco and tobacco leaves is 0.09 euros, and the consumption tax on heated tobacco (HNB) is approximately 0.22 euros.
This comparison reveals several issues. In the future, many European countries may impose consumption taxes on electronic cigarette oil, which may gradually increase. At the same time, Latvia has a relatively high annual increase in the consumption tax on e-cigarettes. And the consumption tax on heated tobacco in this country is higher than that on traditional cigarettes.
At the same time, it also explicitly states that through consumption tax, the retail price difference between alternative products will be reduced.
Why are taxes levied? The Ministry of Finance of Latvia stated that the consumption tax on cigarettes, e-cigarettes, and alternative tobacco products is first and foremost for the sake of protecting public health, while also ensuring the revenue of the national budget, but it does not affect the free trading of these goods in the EU market.
Latvia is a small country in Eastern Europe with a population of only 1.88 million. Belonging to the Indo European language family, there are also Jewish, Estonian and other ethnic groups. The number of girls is much higher than that of men, and they also have the beauty of Russian women and the elegance of Western European women. The country also focuses on environmental protection, and there are many lakes and rivers, which are very suitable for leisure living.
(Location)
With the development of the e-cigarette industry, European countries are also incorporating e-cigarettes into their tax systems, which is expected to be an inevitable trend. Invisibly squeezing profits or causing market prices to change!