China to impose consumption tax on e-cigarettes from November

China will impose a consumption tax on e-cigarettes in November, according to a joint statement released on October 25 by the country's Ministry of Finance, General Administration of Customs, and State Taxation Administration.

The tax rate on the production or import of e-cigarettes will be 36 per cent and that on wholesale distribution will be 11 per cent, CGTN reports citing the statement.

By the end of 2021, China's e-cigarette market was worth 19.7 billion yuan ($2.7 billion), with year-on-year growth of 36 per cent, and there were more than 1,500 e-cigarette makers or related companies in the country, according to data from The Electronic Cigarette Professional Committee of China Electronic Chamber of Commerce.

China is the world's largest e-cigarette maker and exporter – more than 95 percent of e-cigarettes and related products are made in China, of which 70 per cent are produced in Shenzhen, Securities Times reported in June, quoting a local official.

In response to the rapid growth of the e-cigarette industry, China has updated its regulations for the booming new sector.

The State Tobacco Monopoly Administration (STMA), the country's cigarette market supervisor, announced in September that from October 1 this year, e-cigarette market entities must obtain a license to continue making and selling their products.