National Treasury’s economic tax analysis chief director Chris Axelson has explained why there will be a flat tax on vaping, regardless of the nicotine content of the liquid.
— based on the amount of liquid they contain — has been agreed upon in principle.
Axelson explains his team reviewed the global research on harm reduction via ENDS and heated tobacco products and produced a taxation discussion paper in December last year. “If we wanted to tax optimally, one option was to base that on the amount of nicotine in the product and then tax those with no nicotine at a lower rate. It’s a nice policy design idea, but almost all countries tax on a flat rate based on the amount of liquid . It’s incredibly simple but unfortunately, it doesn’t target nicotine content. So, our proposal is a flat tax rate based on the amount of liquid .
Medical Brief asked Axelson about Snus, a steam-pasteurised oral smokeless product that has almost totally displaced combustible tobacco in Sweden and Norway, rendering their populations far healthier than other European nations. He was unaware of any taxation intent for it in SA at present, “but we’ll have to check the scope before we do the legislation”.
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