E-Cigarettes and the Future

Smoking is proven to be dangerous and smokers all know the risks. Cigarette smokers expose themselves to the increased odds of dying from cancer. All over the world, the tobacco industry has significant political influence.

Electronic Cigarette Smoking and Taxation

It would cost the UK government over £12 billion in lost tobacco duty annually if they succeed in getting all the smokers to quit. Alcohol is harmful for its users and also raises billions annually in tax duty. Electronic cigarettes and vaporizers have received an amount of negative press recently.

It makes you wonder if the government have got their priorities right when they introduce health and safety legislation to reduce the 200 annual fatalities that happen annually in the workplace, while at the same time raising over £12 billion from the 100,000 annual tobacco related deaths.

The country can’t afford for its smokers to all give up smoking. It appears that the government will only protect people if it suits their finances.

E-Cigarettes and Possible Regulation

As more people switch to e-cigarettes, tobacco duty revenues will fall, requiring the need for duty on e-liquid. Once vaporizers are regulated, the large manufacturers will dominate the market place. Tax revenues need to be found from somewhere and regulating e-cigarettes will allow the government to recover lost tobacco duty. Lost tobacco duty revenues could be recovered by regulation of e-cigarettes, allowing them to be taxed.

Opponents to Electronic Cigarettes

Both the tobacco industry and the smoking cessation industry have the most to lose from the rising popularity of electronic cigarette devices. Nicotine patches and gum can’t provide the same satisfying hit of nicotine that an e-cigarette or vaporizer can. It is difficult for tobacco companies to campaign against e-cigarettes on health grounds. The campaign against e-cigarettes is believed to be being driven by sections of the smoking cessation industry, maybe even being quietly supported by some tobacco companies.

Potential Regulation of E-Cigarettes

The introduction of tax on e-cigarettes and e-liquid will offset some of the duty lost by smokers making the switch, but it is unlikely that e-liquid would be taxed to the same onerous levels as tobacco. Because e-liquid is made up of easy to obtain ingredients, it will always be possible to make your own e-liquid, thereby negating any duty levied on regulated products. It is likely that official suppliers will warn of the dangers of unauthorised supplies, in much the same way as we were warned about counterfeit cigarettes.

During the heyday of cigarette smuggling most cigarettes were duty free “real” cigarettes rather than faked copies. Calling them fake allowed horror stories to be spread. If the use of electronic cigarettes continues to grow at current levels then it is highly likely that governments worldwide will regulate them. In order for e-cigarettes to become a mainstream product, the government will need to be able to apply duty to e-liquid.

The important point is that if e-liquid can’t be properly regulated and taxed then the devices will in all probability be banned to protect tobacco duty revenues. E-cigarettes and vaporisers look likely to be regulated by governments worldwide in the next few years especially if they continue to grow in popularity. Shrinking tobacco duty revenues will cause the government to act on regulation and taxation of electronic smoking devices and e-liquid.

Our conclusion therefore must be that before long electronic cigarette devices will face governmental regulation and taxation to some degree.