Tobacco and E-cigarette Price and Taxation in Canada EVIDENCE FROM THE INTERNATIONAL TOBACCO CONTROL POLICY EVALUATION PROJECT MAY 2022
The implementation of new provincial-level taxes on vaping products in several provinces in 2020 and 2021, and the forthcoming Federal government excise duty on vaping liquid in 2022 should be accompanied by further increases in taxes on cigarettes and roll-your-own tobacco, along with systematic monitoring of the effects of these changes on youth uptake of nicotine products, and transitions between use of cigarettes, vaping products, and dual use of cigarettes and vaping products.
How do users compare the costs between nicotine vaping products and cigarettes? Findings from the 2016–2020 International Tobacco Control United States surveys
Higher cigarette taxes are associated with perceived financial incentives for nicotine vaping products (NVPs) over cigarettes, whereas NVP taxes are not associated with perceived cost comparison between NVPs and cigarettes.
Do Tobacco Companies Have an Incentive to Promote “Harm Reduction” Products?: The Role of Competition
While cigarette companies will back alternatives to combusted tobacco when threatened by competition, the prospects for their lasting conversion to NCNDPs will depend on the extent of such competition, which will be influenced by government regulation of tobacco products. Regulations that limit competition from independent firms while also protecting cigarette company profits risk slowing or even reversing recent declines in smoking, especially among youth and young adults. Regulations that reduce the appeal and addictiveness of combusted tobacco products, such as higher cigarette taxes or a reduced nicotine standard, will encourage smokers to quit and/or switch to less harmful non-combusted forms of tobacco. The regulation of non-combustible nicotine delivery products and cigarettes should be proportionate to their relative risks, so that smokers have incentives to switch from combustibles to safer alternatives, and cigarette companies have incentives to promote safer products.
E-cigarette Price Impacts legal and Black-Market Cigarette Purchasing Under a Hypothetical Reduced-Nicotine Cigarette Standard
These data suggest that some smokers are willing to engage in illicit cigarette purchasing in a reduced-nicotine regulatory environment, but e-cigarette availability at lower prices may reduce black-market engagement and shift behavior away from combusted cigarette use.
THE EFFECTS OF E-CIGARETTE TAXES ON E-CIGARETTE PRICES AND TOBACCO PRODUCT SALES: EVIDENCE FROM RETAIL PANEL DATA
In this paper, we examine the effects of e-cigarette taxes on e-cigarette prices, e-cigarette sales, and other tobacco product sales. We find that e-cigarette taxes are almost fully shifted to consumer prices. This pattern of results suggests that policymakers almost fully control e-cigarette retail prices through the setting of tax policy. Our paper finds evidence that e-cigarettes and cigarettes are economic substitutes, particularly with respect to e-cigarette taxes increasing cigarette sales. This finding is concerning from a public health perspective given that e-cigarettes are less dangerous products. One concept endorsed by a number of leading national experts is to tax e-cigarettes proportionate to their risk relative to cigarettes as a way to reduce public health harm (which is related to but different from overall social welfare).
E-cigarettes: striking the right balance
Continued surveillance of e-cigarette and smoking in all age groups is warranted. Health authorities need to recognise the continuum of risk associated with all nicotine products, so that regulations are proportionate to the harm the products cause—ie, more stringent for the highest risk products (cigarettes) than those that are less harmful (nicotine medications, oral tobacco, e-cigarettes).9
Young adult responses to taxes on cigarettes and electronic nicotine delivery systems
In the United States, higher ENDS tax rates are associated with decreased ENDS use but increased cigarette smoking among 18- to 25-year-olds, with associations reversed for cigarette taxes.
Optimal Taxation, the Underground Economy and Government Policy: Recommendations for Tobacco, Vaping, Marijuana and Gaming
In summary, it is recommended that the federal government impose no further taxes on e-liquid as long as contraband tobacco is easily accessible. If provinces impose their own excise taxes on e-liquid, they should be lower than corresponding federal excise taxes and should also not lead to significant price increases for e-liquid.
Vapor products, harm reduction, and taxation: More questions than answers for a young and dynamic product market
Principles of harm reduction recognize that every proposal has uncertain outcomes as well as potential spillovers and unforeseen consequences. Nevertheless, the basic principle of harm reduction is a focus on safer rather than safe. Policymakers must make their decisions weighing the expected benefits and expected costs. With such high risks and costs associated with cigarette and other combustible use, taxes and regulations must be developed in an environment of uncertainty and with an eye toward a net reduction in harm, rather than an unattainable goal of zero harm.
Vapor products, harm reduction, and taxation Principles, evidence, and a research agenda
Principles of harm reduction recognize that every proposal has uncertain outcomes as well as potential spillovers and unforeseen consequences. Nevertheless, the basic principle of harm reduction is a focus on safer rather than safe. Policymakers must make their decisions weighing the expected benefits and expected costs. With such high risks and costs associated with cigarette and other combustible use, taxes and regulations must be developed in an environment of uncertainty and with an eye toward a net reduction in harm, rather than an unattainable goal of zero harm. Even a small reduction in the number of cigarette smokers can have a big impact on public health, health expenditures, and labor productivity.
