E-cigarette is invented two decades ago in China and became available in Europe and the US as early as 2006/2007. Following years of turbulent growth, e-cigarette sales now surpassed the $20Bn mark (global retail turnover per year). Therefore, the category is no longer under the radar and is a subject of controversy/debate. Increasingly, Governments across the world are introducing excise tax on the category.
April 2026: Israel Moves to Restructure Tobacco & Nicotine Taxes
Israel is advancing a comprehensive reform of tobacco and nicotine taxation as part of its 2026 fiscal and public health strategy, with the dual objective of reducing consumption – particularly among younger users – and increasing government revenues. The reform places strong emphasis on aligning tax treatment across product categories, including cigarettes, heated tobacco products, roll-your-own tobacco, and e-cigarettes.
Cigarettes remain the most heavily taxed category. They are subject to a 270% ad valorem tax on the wholesale price, combined with a specific excise of ₪555.28 per 1,000 cigarettes. In addition, a minimum total tax floor applies, set at ₪984.57 per 1,000 cigarettes (US$6.55 per pack of 20), ensuring a consistently high tax burden regardless of pricing variations.
Heated tobacco products are being taxed broadly in line with cigarettes under the reform framework. This includes a 270% ad valorem component, alongside a lower specific excise of approximately ₪429.66 per 1,000 sticks and a minimum tax floor of around ₪823.10 per 1,000 sticks (US$5.47 per pack of 20). While still slightly below cigarettes, the gap is relatively narrow, reflecting a policy direction toward harmonization.
E-cigarettes and vaping products are subject to a different structure based on product characteristics rather than value. The proposed system introduces a specific tax of ₪1 (US$0.33) per milliliter of e-liquid, in addition to a fixed levy of ₪30 (US$10) per device, applicable to both disposable and reusable products. This marks a shift toward more systematic taxation of vaping products, which had previously been less tightly regulated.
Roll-your-own tobacco continues to be taxed on a weight basis, with recent increases including an additional ₪5 per 40-gram pack. These adjustments aim to limit substitution from factory-made cigarettes to lower-taxed loose tobacco.
Beyond tax rates, the reform also includes structural measures such as the gradual elimination of duty-free tobacco exemptions by 2028 and the removal of certain VAT exemptions on vaping products. Regulatory oversight is also set to expand, particularly for e-cigarettes, with new licensing and reporting requirements. Overall, the direction of policy is toward a more unified and stringent tax regime across all nicotine products, reducing disparities between categories while reinforcing public health objectives.
October 2025: Ireland will impose €0.50/mL excise tax on vaping liquids
Ireland will impose an excise tax of €0.50 per milliliter on all vape e-liquids from November 1, 2025. This will be the highest rate in the EU – even higher than the €0.12-€0.36 per milliliter Union rate foreseen in the pending EU TTD proposal. Following the introduction of the excise tax, 10-ml e-liquid bottle retailing at €5 will more than double to €11 (including 23% VAT). The Irish Government also plans to further restrict vape flavors, vape packaging & advertising and ban disposable vapes in order to curb youth access. Since December 2023, sales of vapes to people under 18 have been prohibited in Ireland.
Separately, the government recently raised cigarette duty by €0.50 per pack and bringing the most common cigarette price point to €18.5.
October 2025: The plan to introduce a vape tax in 2026 fails through in France
In abudget-review session, the Commission des Finances de l’Assemblée Nationale voted to remove the tax on vaping products that the Government had proposed in Article 23 of the draft 2026 budget: namely €0.30 per 10 mL bottle of low-nicotine vapes and €0.50 for higher-nicotine vapes. Several deputies argued that e-cigarettes, while not risk-free, are significantly less harmful than conventional tobacco and can help smokers quit. On the other hand, some raised concerns about the risk of nicotine addiction and vaping acting as a “gateway” into smoking for the youth.
Although the tax proposal was removed in the Commission, the decision still needs confirmation when the budget is debated in the full Assembly; furthermore, other parts of Article 23 – such as, a prohibition on online sales of vaping products, which account for about 25–30% of sales in France – were approved. Moreover, EU-level rules seeking to tax vapes by January 2028 were flagged.
June 2025: Crotia introduces vape tax
From July 1, 2025, Crotia will introduce an excise duty of €0.20 per milliliter on vaping liquids. At the same time, the excise duty on heated tobacco will increase from €185.82 to €198.50 euros per kilogram (i.e. €1.2 tax on a pack of IQOS heated tobacco sticks), while the excise duty on new tobacco products will increase from €114.15 to €120.50 per kilogram. The specific excise duty on cigarettes will increase from the €53.10 to €56.10 per thousand sticks while the ad-valorem (proportional) excise duty of 34% of the retail price of cigarettes remains the same. The minimum excise duty on cigarettes will increase to €124.20 euros per thousand cigarettes (i.e. €2.5 for a pack of 20 cigarettes). The new regulation also introduces higher excise duties on fine-cut tobacco for rolling cigarettes and other smoking tobacco, including cigars and cigarillos. The excise duty for this group will now amount to €120.50 per kilogram, or per thousand pieces, compared to the current €114.15.
February 2025: Vape tax bill advances in Colombia
The Bill that seeks to impose 30% tax on vapes is approved in the House of Representatives in Colombia. The so-called “health tax” aims to reduce the use of vapes in the country and collect around Col$1 billion in taxes to help finance the public health departments. The Bill will be debated in the Senate next.
January 2025: Spain introduces vape tax
Spain introduced a new tax on e-cigarette liquids starting January 1, 2025, following the Omnibus Decree of December 23, 2024. The tax will be €0.15 per milliliter for liquids with less than 15 mg/ml of nicotine and €0.20 per milliliter for higher concentrations. Considering that e-liquids are sold in 10 to 30 milliliter bottles, the tax burden will range from €1.5 to €6 per bottle, depending on the nicotine content. Additionally, nicotine pouches will be taxed at €0.10 per gram1.
The law also imposes compliance obligations on businesses. Retailers and wholesalers must declare their stocks of e-liquids and nicotine pouches as of April 1, 2025. This declaration, which must be submitted electronically to the Spanish Tax Agency, will determine the stock subject to taxation. Businesses will then have until July 2025 to calculate and pay the taxes due on these stocks.
December 2024: EU countries demand vapes to be included in the EU’s tobacco tax law
Sixteen EU countries asked the European Commission to propose a new EU tobacco tax law to include new products, such as e-cigarettes (vapes)2. The initiative, led by the Netherlands, has the support of Croatia, the Czech Republic, Denmark, Estonia, Finland, France, Germany, Latvia, Slovakia, Spain, Belgium, Bulgaria, Ireland, Slovenia and Portugal. In a letter to the Commission, 16 Finance Ministers demanded a revision to the EU’s 2011 tobacco tax law as, in the absence of an EU-wide regulation on vaping, each Member State applies different rules and levels of excise tax. They stated that this fragmentation causes an uneven playing field across the Member States and the distortion of the bloc’s single market.
EU Tobacco Tax Directive (EU TTD), Council Directive 2011/64/EU on “the structure and rates of excise duty applied to manufactured tobacco”, was established in June 2011 – before the new nicotine products gained a significant foothold in the EU. Therefore, new nicotine products (vapes, heated tobacco, nicotine pouches) are not covered under the existing legislation. An update to the Directive was due at the end of 2022, but it has been delayed. EU Governments want the new Commission, which took office on December 1, 2024 for the next five years, to address the issue urgently.
Luxembourg: March 2024
Luxembourg will introduce taxes on e-cigarette liquids and nicotine pouches from October 1, 2024 (tax rate: €120/liter for e-liquids and €22/kilo for nicotine pouches). In addition to the taxation, Luxembourg will include the new-generation tobacco products within the scope of the country’s new national anti-smoking program.
UK: March 2024
The UK Government will introduce a new duty on vaping products from 1 October 2026 with registrations for the duty opening from 1 April 2026. The rates will be £1.00 per 10ml for nicotine free liquids, £2.00 per 10ml on liquids that contain 0.1-10.9 mg nicotine per ml and £3.00 per 10ml on liquids that contain 11mg or more per ml. A 12-week consultation will be published on the policy design and technical details alongside the Spring Budget.
UK: January 2024
A tax on vaping will be introduced in the UK3 as part of the Spring Budget (- to be announced on March 6, 2024). In 2014, Italy became the first country to tax e-cigarette liquid and the current excise tax rate on is €0.132/mL. Germany charges a levy of €0.20/mL (as of Jan 1, 2024) and has a plan in place to increase the excise tax rate to €0.32/ml in 2026. The UK Government may set a tax rate of £0.20/mL if inspired by these front-runners.
A 10ml bottle of e-liquid costs around £4 in the UK. The levy is likely increase the cost of vaping liquid by more than 25% and as much as 50%. Major tobacco companies support the introduction of an excise duty on all vaping products.
Meanwhile, as of January 1, 2024, Belgium will apply an excise duty of €0.15/ml on e-liquids and Romania will increase the e-liquid excise duty from 0.64 lei/ml to 0.81 lei/ml (€0.16/ml). Moreover, Indonesia will introduce a 10% additional excise tax on vapes – on top of the 57% excise duty imposed on e-liquids since 2018. In Indonesia, the revenue from e-cigarette taxes amounted to Rp1.75T (~$120 Mn), or ~1% of the total tobacco excise revenue, in 2023.
Ireland: December 2023
Ireland reconfirms its intention to apply a levy on e-cigarettes4 (in 2024) despite the challenging implementation environment and significant IT, administrative, control and compliance costs associated to the implementation. Irish Finance Minister cited the delays in the revision of the EU tobacco directives (EU TPD/TTD) as the root cause of the implementation challenges. Most excise taxes in Ireland are governed by the EU legislation on harmonized excisable products: absence of an EU-wide harmonization for e-cigarette taxation increase the compliance and administrative costs as the existing movement controls and tax warehousing (for tax collection purposes) cannot be used.
Ontario (Canada): November 2023
Ontario will add a provincial excise duty to vaping products which would double the current federal duty rates5. The combined tax would see manufacturers and importers paying $2 per two milliliters of e-liquid for the first 10 milliliters, then $2 per 10 milliliters for volumes beyond that. Ontario follows Quebec, Nova Scotia, British Columbia, Saskatchewan, Newfoundland and Labrador to introduce a provincial excise tax on vaping products.
Malaysia: February 2023
Malaysia imposes excise duties on vapes6.
Quebec (Canada): December 2022
Quebec follows Nova Scotia, British Columbia, Saskatchewan, Newfoundland and Labrador to introduce a provincial excise tax on vaping products7. The federal government already levied a tax which will come fully into effect in 2023. The province’s excise tax is expected to match it.
The EU: November 2022
Brussels proposes first EU-wide vaping levy8. The update to the 2011 EU tobacco taxation directive will bring the tax on novel smoking products, such as e-cigarettes and heated tobacco, in line with cigarettes:
– Stronger vapes: at least 40% excise duty
– Lower-strength vapes: 20% duty
– Heated tobacco: 55% duty or a tax rate of €91/’000.
China: November 2022
China imposes consumption tax on e-cigarettes9. A tax rate of 36% will be placed on the production or import of vapes while an 11% tax will be placed on the wholesale distribution of vapes.
Switzerland: October 2022
The Swiss government proposed amending the Tobacco Act to tax e-cigarettes10. The proposed tax rate is CHF0.2/ml for reusable vapes and CHF1/ml for single use vapes.
Canada: April 2022
Canada will introduce excise tax on vaping products at the federal level as of Oct 1, 2022 (later postponed to 2023)11:
– CAD 1 for a 2 ml cartridge (or fraction thereof)
– CAD 5 for a 10ml bottle (CAD 1 for every additional 10ml or fraction thereof)
South Africa: February 2022
The National Treasury proposes to introduce a specific excise tax on e-cigarettes based on its existing policies applicable to other excisable products
References:
- https://ggtc.world/news-and-events/spain-implements-tax-on-vaping-products-and-nicotine-pouches ↩︎
- https://www.reuters.com/world/europe/eu-countries-want-vaping-included-blocs-tobacco-tax-law-2024-12-09 ↩︎
- https://www.mirror.co.uk/news/politics/vapers-hit-new-tax-e-31756349 ↩︎
- ‘Challenging’ to introduce tax on vapes, says Michael McGrath (irishexaminer.com) ↩︎
- https://www.cbc.ca/news/canada/toronto/ontario-vaping-tax-youth-1.7018364 ↩︎
- https://thestar.com.my/news/nation/2023/02/24/govt-to-impose-excise-duties-on-vape-products ↩︎
- https://montreal.ctvnews.ca/quebec-plans-to-hit-the-vaping-industry-with-a-new-tax-next-fall-1.6188629 ↩︎
- https://ft.com/content/6f1c4211-5e54-4aa8-a391-0ec9bc5244de ↩︎
- https://reuters.com/world/china/china-impose-consumption-tax-e-cigarettes-november-2022-10-25 ↩︎
- https://www.swissinfo.ch/eng/e-cigarette-tax-mooted-in-switzerland/48008814 ↩︎
- https://ctvnews.ca/politics/budget-includes-pocketbook-promises-on-low-alcohol-beer-vaping-and-menstrual-products-1.5852712 ↩︎
