Global taxation of electronic nicotine and non-nicotine delivery systems: a cross-country evaluation.

Background: Taxation is a key component of tobacco products' regulation given its proven effectiveness to generate revenue and achieve public health goals. The diversity of the market for e-cigarettes (electronic nicotine delivery systems and electronic non-nicotine delivery systems, ENDS/ENNDS) complicates comparative analyses per unit, thus challenging efforts to assess countries' excise tax burdens for e-cigarettes. Further complicating taxes on e-cigarettes is the necessity to balance two public health priorities: (1) deterring initiation among people who have never smoked, and (2) supporting cessation efforts among people currently smoking or who previously smoked. This study evaluates and compares excise tax burdens and tax system characteristics of e-cigarettes across 54 countries.

Methods: To determine countries' excise tax burdens per millilitre of e-liquid, we collect a unique database of tax characteristics and prices in countries where ENDS/ENNDS are currently sold. We calculate the excise tax per millilitre of e-liquid and convert e-liquid prices to a comparable price per millilitre across countries.

Results: Thirty countries employ a specific excise system, 10 apply an ad valorem system, 9 apply a tiered specific system, 1 applies a tiered ad valorem system and 4 apply a mixed tax system. The excise tax burden is highest in Belarus (87.2%, specific), Norway (81.2%, tiered specific) and Egypt (74.7%, mixed), and lowest in Costa Rica (7.4%, ad valorem), Paraguay (2.9%, ad valorem) and Croatia (0%, specific).

Conclusion: The advantages of one tax system over another are context specific. Tax burdens tend to be much larger in countries that use a specific tax than in countries that use a value-based (ad valorem) tax.