With the popularity of ecigarettes continuing to rise as more and more smokers make the switch from tobacco, the subject of taxation is starting to be debated. Around 80% of the cost of a packet of twenty regular tobacco cigarettes is made up of duties and taxes. The taxes on tobacco provide the Government with around 15 billion pounds annually and this income is falling year on year as more people ditch tobacco and take up electronic cigarettes. So should e cigarettes be taxed?
The Reasons Not to Tax Ecigarettes
The high taxes and duties on tobacco are designed to cover the cost of treating the illnesses and diseases caused by smoking, it costs the NHS billions of pounds each year to do this. Secondly the higher the cost of tobacco the less people there are who can afford to buy it and use it, so high prices should mean less smokers.
Without doubt the main reason so many smokers have been switching to ecigarettes is health safety, the relief of removing the constant fear of developing a fatal disease. What is even more important than making the switch is not going back to smoking and there is a very important factor in this, simply cost! It is significantly, around 80% cheaper to use ecigarettes than it is to smoke traditional tobacco cigarettes. Smoking rates are higher in lower income groups and the cost saving, which can be thousands of pounds a year makes a big difference.
Taxing electronic cigarettes in the same way as tobacco smoking products would remove the cost incentive that helps people to permanently move away from tobacco. The cost incentive should be maintained and encouraged to help more and more people escape the dangers of smoking.
It is difficult to justify an e cigarette tax on health cost grounds alone as the health risks of using e cigarettes cannot be compared to those associated with tobacco smoking. If smoking was completely replaced by vaping the NHS would save billions of pounds each year. Taxing would prevent many from making the switch in the first place and many more from making the switch permanent.
The Reasons to Tax Ecigarettes
There is no logical reason to tax ecigarettes. Almost everyone now agrees that they are, even if not completely, many times safer than tobacco. If a tax is levied it will be for one reason only, to fill the void left in the Governments tax coffers by the decline in tobacco tax revenue. This would mean that the Government is virtually encouraging tobacco smoking when there is a safer alternative available, helping to condemn thousands of people to an early death each year.
Some observers see the new electronic cigarette legislation that is due to come in to force in 2016 as the first step towards taxation, classification of products under the legislation would certainly make the process of levying and controlling taxation easier for the Government to apply.
Others believe that by 2016 there could be as many as five million people using ecigarettes in the UK. That’s a lot of people and a lot of votes which will surely have an impact on the Government position on the taxation of electronic cigarettes. It’s also hoped that within the next eighteen to twenty four months we start to see official NHS figures being released that show the switch from tobacco is starting have a positive impact on health and health spending.