From the beginning of October, manufacturers of tobacco heaters and e-liquids have to pay excise duties on them. As it results from the analysis of the Polish Chamber of Commerce (KIG), the current system is designed in such a way that it causes unequal tax burdens for products from the same category. This is hitting Polish e-cigarette manufacturers and Polish farmers producing tobacco for tobacco warmers. The highest excise duty is paid by producers of liquid cartridges for open e-cigarettes, and these are usually Polish small and medium-sized companies. The difference in the tax burden between different products is up to six times.
“We currently have one, quite a high rate of excise duty on traditional tobacco products, i.e. mainly cigarettes, and a reduced, preferential rate for alternative products. However, there is a certain differentiation within them – some of these products are simply much less taxed than others. It seems that this was not the goal of the administration,” Piotr Soroczyński, chief economist of the KIG, said.
As he pointed out, tax differences are mainly due to technological differences between devices. These, in turn, translate into differences in the average daily consumption of e-liquids.
“Open e-cigarette systems are older and mainly produced by domestic producers. On the other hand, closed systems are more modern, in which e-liquids are used more effectively, which means that they consume correspondingly fewer excise goods,” Krzysztof Rutkowski, partner at the Rutkowski i Wspólnicy law firm, said.
The excise duty rate for liquids for closed e-cigarette systems is up to 25 times lower than for regular cigarettes and five times lower than for tobacco heaters. Producers of the latter, in turn, are obliged to pay the highest excise duty, as well as small and medium-sized Polish companies producing e-cigarette liquids for the so-called open systems. This means that the current tax solutions favor the market of the closed systems, over 60 percent of which is controlled by an international tobacco company.