The Ministry of Finance is imposing a consumption tax on all e-cigarettes beginning 1 November, reports Reuters.

The new consumption tax will see China’s e-cigarette industry become further entwined in the state-backed tobacco monopoly with a tax rate of 36 per cent being placed on the production or import of e-cigarettes and 11 per cent tax placed on the wholesale distribution of e-cigarettes.
China’s State Tobacco Monopoly Administration (STMA), which regulates the sale of tobacco products, has become increasingly aware of the growing number of e-cigarette producers and, in 2021, required all e-cigarette companies to obtain a licence in order to continue selling their products, reports Reuters. Furthermore, the sale of flavoured e-cigarettes was banned with many smaller companies closing and even big brands such as Relx Technology Inc and Smoore International Holdings Inc suffering from the new regulations. According to Reuters, the STMA operates under China’s Ministry of Industry and Information Technology (MIIT). China Tobacco, STMA’s commercial arm, is a shareholder in China’s state-backed investment fund for the chip industry.