Current tax proposals on alternative nicotine products popularly known e-cigarettes as contained in the 2022 finance bill should not be allowed to become law, a lobby group has said.
The bill is set to double the excise duty on alternative nicotine products such as e- cigarettes and nicotine pouches promoting cigarettes over tobacco free nicotine products.
If passed into law, e-cigarette devices will now carry a massive 40% excise duty, with an additional excise duty of Kshs 70 per millilitre on liquid nicotine.
The tax structure for refilling e-cigarettes will change so that a 164% tax increase will be imposed on a 100ml vape.
The excise tax on nicotine pouches will more than double from Kshs. 1,200 per kg in the last budget to 2,500 per kg.
Joe Magero chairman of the Campaign for Safer Alternatives says that the increases will fuel the black market for illicit cigarettes and put smokers at risk from potentially dangerous and unregulated products.
Magero further states that excise taxes often referred to as sin taxes are used worldwide to reduce the consumption of harmful products, including alcohol and cigarettes.
“International evidence indicates that, if we want to significantly reduce smoking rates, we should adopt an excise system that reflects the Risk Continuum Model,” he says.
Magero states that under this model, high-risk products like traditional combustible tobacco incur higher tax rates. Meanwhile, less risky, tobacco-free nicotine products are taxed at a lower rate to encourage smokers to switch to these safer alternatives.
He says that the finance bill 2022 lacks this price differential and without this an incentive for smokers to give up tobacco is removed.
By Arnold Olando