News from New Bluehole Consumption. With the official collection of electronic cigarette consumption tax today,new suggested wholesale prices and retail prices on standard products are updated on the National Unified Trading Management Platform,it’s obvious the taxation has been included in the prices.
From now on, Vapes will be taxed with same catalogue as smokes.
On Oct 25,Announcement on the collection of consumption tax on electronic cigarettes was jointly issued by Finance Ministry,General Customs Administrations and State Administration of Tax, and e cigarettes were included in taxation. And the tax calculation is based on prices: tax on production(or importation) is 36%,distribution is 11%. the prices on the platform was updated on Nov 1 after taxation was calculated.
The increase on prices differs between devices and cartridges, and differs between brands
According to the price list on the platform, the increased ratios of cartridges are much more than those of devices. And the ratio differs from between brands as well, generally speaking, the more forward the brands, the high ratio of increase. But there is an exception, VAZO , instead of increasing the prices, It lowered the price, it may be because it priced a little higher before and re-position the brand as well.
Facing the difficulties together,let’s find out who and how to share the tax
After realizing the situation of price increase, the store owners had more to consider:the cost of purchasing had definitely badly increased, and at what price the vapes should be resold.If sell the vapes according to previous prices, but the purchasing prices had increase,the cost of taxation will fall down to the store owners, it will be difficult to run the store if the previous margin is too low.But if resell them after increasing the prices as well,it would may work if it were fruit flavors,but now only sole nicotine flavor is allowed in the market, and illegal fruit flavor still exists,it’s too difficult to resell nicotine vape with higher prices.
Facing with the taxation,actually the brand owners had compromised on the margin by absorbing some increase after taxation.At this moment,the brand owner shares about $1.18,retailer shares about $0.8 while manufacture shares zero on the taxation.but it seems the manufacturer bears much pressure since the brand owners will re-negotiate with the manufacturers after the margin is narrowed
It’s a challenge for all,but it’s an opportunity for the powerful and sharp company,it’s time to re-shuffle the cards
Post time: Nov-02-2022