According to foreign reports, the steam industry advocacy group (ukvia) called on the British government to consider imposing a similar value-added tax rate on e-cigarettes currently applicable to nicotine replacement therapy (NRT). The chancellor of the Exchequer is considering lowering the VAT rate after the coronavirus, as the government last did during the 2008 recession.
In a letter to finance minister Rishi sunak, ukvia urged the government to consider fair competition in the value-added tax rate between NRT and e-cigarette products to support adult smokers who do not quit smoking to switch to e-cigarettes.
The letter points to the recent England public health (PHE) UK e-cigarette report, which found that when using e-cigarette products to try to quit smoking alone or with licensed drugs, the success rate is comparable to or even higher than that of NRT.
Although e-cigarettes are not considered as smoking cessation products, they have a huge potential positive impact on public health. However, there is still a vat gap between NRT products (5%) and e-cigarettes (full 20% VAT, the same as traditional cigarettes). "This is supported by a study commissioned by the British National Health Service (NHS) last year, which shows that the effectiveness of electronic cigarettes is two times that of nicotine patches, gum or spray."
John Dunne, head of ukvia, said the e-cigarette industry was "an important success story for retail in this century, playing an important role in promoting smokers to quit smoking, thereby helping to reduce the huge annual medical costs associated with smoking.".
"However, according to research, nearly one in ten smokers will not switch to e-cigarettes because they think e-cigarettes are too expensive," he said. To continue to encourage about 7 million smokers in the UK (otherwise they will not quit), it is essential to ensure that the price of smokers is still far below that of cigarettes. "
He went on to explain that the UK was still in the recovery phase of covid-19, and that a substantial reduction in VAT on e-cigarettes would be rewarded from an economic and health-care perspective.
"The value-added tax rate for smokers, which is in line with the NRT, will also support the call in the recent Phe report to encourage smokers to try controlled nicotine products, along with smoking cessation drugs and behavioral support, to increase the chances of successful quitting smoking," he said