# VPASA Response to proposed vaping tax 2021



## Hooked (27/2/20)

This is the response from the Vapour Products Association of South Africa, as per their newsletter.

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## Hooked (27/2/20)

They regard taxing vaping as "regressive and ill-considered".  

Firstly, why should vaping not be taxed? Everything else is, so give me one good reason why vaping should be excluded. (Not that I would jump for joy over tax. Not at all. I'm just thinking logically.)

Secondly, if it is taxed it won't be banned! The govt. won't cut off a source of income. 

Join them in "advocating for no tax on vaping"? You've got to be kidding!

Reactions: Agree 3 | Informative 1 | Disagree 3


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## alex1501 (27/2/20)

Hooked said:


> They regard taxing vaping as "regressive and ill-considered".
> 
> Firstly, why should vaping not be taxed? Everything else is, so give me one good reason why vaping should be excluded. (Not that I would jump for joy over tax. Not at all. I'm just thinking logically.)
> 
> ...



AFAIK vaping is @ the moment taxed, just as everything else. What are they proposing is additional "sin" tax and VPASA is complaining on that.
Someone in the bussiness, please correct me if I'm wrong.

Reactions: Like 3 | Agree 11


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## Silver (27/2/20)

The way I have understood it is that the budget refers to taxing vaping in 2021.
It looks like it may be at 75% of the tobacco tax.

Here is the paragraph from the 2020 budget speech:
"In line with Department of Health policy, we will start taxing heated tobacco products, for example hubbly bubbly. The rate will be set at 75 per cent of the rate of cigarettes. Electronic cigarettes, or so-called vapes, will be taxed from 2021."

Its not extremely clear from the above paragraph whether the 75% is only for heated tobacco products - and that vaping will get its own level of tax in 2021 - or that vaping will also be at 75%. Nevertheless, I am assuming they mean that all these products including vaping will be at 75% of the rate on cigarettes.

I just don't know how they will calculate it - is it per ml of liquid? Per bottle? What about hardware? It really could be anything.

At least the number 75% is being used (i.e. less than the equivalent tobacco tax) - but it probably should be much lower than that in order to promote vaping as an alternative to smoking.

If the taxes are fairly similar between smoking and vaping (75% is not very far from 100%), vaping is probably going to get a lot more expensive and will probably put a lot of people off it or discourage people to switch from smoking to vaping.

A much lower proportion of "sin tax" would make more sense to me

I wonder what the differential is in places like the UK for example?

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## GSM500 (27/2/20)

It would be a huge problem for the industry if the price of eliquid doubled overnight. I'm sure DIY juice making would gain traction but this might lead to black market sales. I agree with @Silver, a small tax maybe acceptable but a 100% would really do some damage.

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## Jengz (27/2/20)

Hooked said:


> They regard taxing vaping as "regressive and ill-considered".
> 
> Firstly, why should vaping not be taxed? Everything else is, so give me one good reason why vaping should be excluded. (Not that I would jump for joy over tax. Not at all. I'm just thinking logically.)
> 
> ...


Vaping products are already taxed to the final consumer as we pay VAT on these these products. The whole additional 75% of the analog combustibles is an ADDITIONAL tax on vaping products due to vaping being classified as a 'sin' item.

The reality is that if they have to implement a sintax on vaping products it could only make sense to tax liquid that contains nicotine as all other ingredients are in vape liquid are food grade items. By taxing hardware etc it opens up a lot of possibilities of dispute which i dont feel they will get right.

I don't know how else they can add a sintax, besides only taxing liquid containing nic.

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## Adephi (27/2/20)

There hasn't been an official number on how much they will tax vaping products. But one could belive it will be inline of hubbly's that if 75% of tobacco sintax. So if one goes by that a R200 bottle of juice would cost roughly around R275.

Not ideal, but it is the lesser of the evils. At least vaping would be looked at in light of regulation and not prohibition.

Reactions: Like 3 | Winner 1 | Informative 1


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## Puff the Magic Dragon (27/2/20)

Jengz said:


> to tax liquid that contains nicotine



If this is the approach then one could sell 0mg juice to the public and they could then just add their sin-taxed nic.

If this is done the government wouldn't collect much and the supposed deterrent would be tiny.

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## alex1501 (27/2/20)

https://www.sanews.gov.za/south-africa/sin-taxes-increase

*Sin Taxes increase*
Wednesday, February 26, 2020
Smokers and drinkers will from Wednesday have to dig deeper into their pockets for cigarettes and alcohol.

This comes after Finance Minister Tito Mboweni in the 2020 Budget Speech announced increases of between 4.4 and 7.5% in excise duties on alcohol and tobacco.

From Wednesday, a 340ml can of beer or cider will cost an extra 8c while a 750ml bottle of wine will cost an extra 14c.

Other increases will see a 750ml bottle of sparkling wine cost an extra 61c, while a bottle of 750ml spirits, including whisky, gin or vodka, will rise by R2.89.

A packet of 20 cigarettes will be an extra 74c, while a 25 gram of piped tobacco and a 23 gram cigar will cost an extra 40c and R6.73, respectively.

In its Budget Review report, the National Treasury said Government will introduce a new category or tariff sub-heading for heated tobacco products in the schedule of excise duties. These products are not currently subject to excise duty.

“[These are] to be taxed at a rate of 75% of the cigarette excise rate with immediate effect,” reads the report.

*Electronic cigarettes are different to heated tobacco products: they do not contain tobacco, but they do contain nicotine or other chemicals.


“Currently, electronic cigarettes are not taxed,” said National Treasury.*

The report notes that, globally, policymakers are looking at regulating and taxing these products due to concerns about their health effects.

Government intends to tax electronic cigarettes in 2021.

The 2020 Budget has again not spared smokers and alcohol drinkers.

Taxes on alcohol and tobacco, reads the report, are determined within a policy framework that targets the excise duty burden.

“The excise burdens for most types of alcoholic beverages and tobacco products currently exceed the targeted level as a result of above-inflation increases and price fluctuations,” reads the Budget Review.

Government will increase most excise duties by an amount that matches expected inflation of 4.4% for 2020/21, and by 6% in the case of sparkling wine and 7.5% for pipe tobacco and cigars. – *SAnews.gov.za*



I think they still don't know exactly how (to implement) and how much it will be.

Reactions: Like 3 | Informative 1


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## M.Adhir (27/2/20)

Adephi said:


> There hasn't been an official number on how much they will tax vaping products. But one could belive it will be inline of hubbly's that if 75% of tobacco sintax. So if one goes by that a R200 bottle of juice would cost roughly around R275.
> 
> Not ideal, but it is the lesser of the evils. At least vaping would be looked at in light of regulation and not prohibition.


Pretty much half of the price of an average box of cigarettes goes to Excise (sin tax from what i remember, its around R17.50 that is "sin tax").
If applying percentages (and using the Hubbly theory of 75%) - then i see the tax as follows:

"premium" local 100ml juice = R360
Excise = 75% of 50% of the value, meaning "Sin Tax" = R135.
New juice price = R495

Time will tell i guess - my calcs are linear and based on an "as-is" application. Sin tax is paid across the value chain as far i remember (manufacturer pays it and essentially recoups the cost when selling on to the distros, who then recoup by selling to retailers, etc".

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## Hooked (27/2/20)

Adephi said:


> There hasn't been an official number on how much they will tax vaping products. But one could belive it will be inline of hubbly's that if 75% of tobacco sintax. So if one goes by that a R200 bottle of juice would cost roughly around R275.
> 
> Not ideal, but it is the lesser of the evils. At least vaping would be looked at in light of regulation and not prohibition.
> 
> My point *exactly* @Adephi!

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## M.Adhir (27/2/20)

Jengz said:


> Vaping products are already taxed to the final consumer as we pay VAT on these these products. The whole additional 75% of the analog combustibles is an ADDITIONAL tax on vaping products due to vaping being classified as a 'sin' item.
> 
> The reality is that if they have to implement a sintax on vaping products it could only make sense to tax liquid that contains nicotine as all other ingredients are in vape liquid are food grade items. By taxing hardware etc it opens up a lot of possibilities of dispute which i dont feel they will get right.
> 
> I don't know how else they can add a sintax, besides only taxing liquid containing nic.



Im not so sure VAT is paid on all products vaping related - i have squizzed through a few of my invoices from stores and it doesnt seem all of them apply VAT on purchases. This may also be part of the reason for the regulation aspect - it will close other not so associated loopholes as well.

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## Jengz (27/2/20)

M.Adhir said:


> Im not so sure VAT is paid on all products vaping related - i have squizzed through a few of my invoices from stores and it doesnt seem all of them apply VAT on purchases. This may also be part of the reason for the regulation aspect - it will close other not so associated loopholes as well.


I stated this on the basis that i know a lot of wholesalers in SA and they all charge VAT on their wholesale pricong so it just makes sound business practice to pass that charge on to the final consumer.

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## Hooked (27/2/20)

alex1501 said:


> AFAIK vaping is @ the moment taxed, just as everything else. What are they proposing is additional "sin" tax and VPASA is complaining on that.
> Someone in the bussiness, please correct me if I'm wrong.



I think you've hit the nail on the head @alex1501

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## GSM500 (27/2/20)

M.Adhir said:


> Pretty much half of the price of an average box of cigarettes goes to Excise (sin tax from what i remember, its around R17.50 that is "sin tax").
> If applying percentages (and using the Hubbly theory of 75%) - then i see the tax as follows:
> 
> "premium" local 100ml juice = R360
> ...


If the 75% of Ciggie tax is applied to E-liquid, a R200 bottle of Juice would cost about R290 with the tax applied.

If I'm not mistaken, they will tax 0mg juice as well, even though it does not have Nic in it, there are other potentially harmful chemicals in the juice. - This will be their argument

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## Hooked (27/2/20)

GSM500 said:


> If the 75% of Ciggie tax is applied to E-liquid, a R200 bottle of Juice would cost about R290 with the tax applied.
> 
> If I'm not mistaken, they will tax 0mg juice as well, even though it does not have Nic in it, there are other potentially harmful chemicals in the juice. - This will be there argument



It will be awful - there's no doubt about that, but let's rather lose the battle but win the war.

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## BioHAZarD (27/2/20)

M.Adhir said:


> Im not so sure VAT is paid on all products vaping related - i have squizzed through a few of my invoices from stores and it doesnt seem all of them apply VAT on purchases. This may also be part of the reason for the regulation aspect - it will close other not so associated loopholes as well.


Will depend on whether the store is VAT registered in the first place ... if not then they wont apply a VAT charge.

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## alex1501 (27/2/20)

Hooked said:


> It will be awful - there's no doubt about that, but let's rather lose the battle but win the war.



I find that strategy rather curious in this particular case. How it works exactly? They (government) attacks, we surrender without a fight. What's the next step? I'm missing the winning part.

Here is VPASA open letter to the Finance Minister:
https://vpasa.org.za/wp-content/uploads/2020/02/VPASA-Open-Letter-To-Minister-Tito-Mboweni-.pdf

I think VPASA deserves our full support in this case, but I could be wrong.

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## Resistance (27/2/20)

Are we as vapers going to dispute this tax issue or are we going to stand and watch what happens.
I am also pretty sure they have trolls watching our discussions and trying to formulate their plan towards taxing vape products by what they read here.
(Not a conspiracy theory,it's how I feel)

I see this as a similar issue as the new hardware, that had to have nicotine warnings. That was like admitting to doing something that never happened.

Anyway I will still find a loophole.

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## Resistance (27/2/20)

alex1501 said:


> I find that strategy rather curious in this particular case. How it works exactly? They (government) attacks, we surrender without a fight. What's the next step? I'm missing the winning part.
> 
> Here is VPASA open letter to the Finance Minister:
> https://vpasa.org.za/wp-content/uploads/2020/02/VPASA-Open-Letter-To-Minister-Tito-Mboweni-.pdf
> ...



Where do I sign???

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## alex1501 (27/2/20)

Resistance said:


> Where do I sign???



https://vpasa.org.za/index.php/2020/02/18/stop-excise-on-vaping/
Should be here, but I feel they could improve it a little.

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## Resistance (27/2/20)

alex1501 said:


> https://vpasa.org.za/index.php/2020/02/18/stop-excise-on-vaping/
> Should be here, but I feel they could improve it a little.


Doesn't work.
The captcha is messing with me. I do it tomorrow.

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## Timwis (28/2/20)

Adephi said:


> There hasn't been an official number on how much they will tax vaping products. But one could belive it will be inline of hubbly's that if 75% of tobacco sintax. So if one goes by that a R200 bottle of juice would cost roughly around R275.
> 
> Not ideal, but it is the lesser of the evils. At least vaping would be looked at in light of regulation and not prohibition.


Isn't 75% of R200 equal to R150 so it would cost R350?

Reactions: Agree 1


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## Hooked (28/2/20)

alex1501 said:


> I find that strategy rather curious in this particular case. How it works exactly? They (government) attacks, we surrender without a fight. What's the next step? I'm missing the winning part.
> 
> Here is VPASA open letter to the Finance Minister:
> https://vpasa.org.za/wp-content/uploads/2020/02/VPASA-Open-Letter-To-Minister-Tito-Mboweni-.pdf
> ...



If we look at what is happening internationally, vaping per se is under threat, with countries banning it outright or banning flavours. There is a global threat, or *war*, against vaping. Our govt. could easily be swayed and we don't want that, do we?

So yes, give in to sin tax without a fight. Our govt. wants money from vaping - give it to them. Don't fight that *battle.* By so doing, they won't ban vaping.

Rather lose the *battle of sin tax *and *WIN the war for vaping.
*
Let's use home invasions as an analogy. If someone breaks into your house while you're there, you could fight them to prevent them stealing your valuables - but you will probably lose your life in the process.

Or, you could calmly say, "Take whatever you want." Perhaps you'll lose your cellphone, laptop and TV - but you'll still have your life.

Rather *lose your material goods* and *WIN your life.*
Rather* lose the battle of sin tax and WIN vaping.
*
In Life, we have to choose our battles wisely.

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## alex1501 (28/2/20)

Hooked said:


> If we look at what is happening internationally, vaping per se is under threat, with countries banning it outright or banning flavours. There is a global threat, or *war*, against vaping. Our govt. could easily be swayed and we don't want that, do we?
> 
> So yes, give in to sin tax without a fight. Our govt. wants money from vaping - give it to them. Don't fight that *battle.* By so doing, they won't ban vaping.
> 
> Rather lose the *battle of sin tax *and *WIN the war for vaping.*



I fully understand and appreciate that aproach. It's almost attractive until you start thinking about it.

First, by accepting it without a fight, we accept the position that vaping is a problem and not a solution. And personally, I strongly disagree with that.
Many people already find vaping too expensive, double that price and half of them go back to smoking.

The vaping market is already small and fragile in SA, if it starts shrinking istead of growing, shops loose the turnover, they'll start first reducing (range and quantity of) the stock, then start closing down...
...Long story short:
In the end we are back in Pick and Pay in line for "Twisp Cue"(or similar), and I can't see that as a victory (for anyone, except maybe, for the last standing company).

Disclaimer:
I don't work for any vaping company.
This is only my personal opinion.
The use of "Twisp" name is only coincidental.

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## GSM500 (28/2/20)

Timwis said:


> Isn't 75% of R200 equal to R150 so it would cost R350?


It is 75% of our current ciggie tariff which is around 40% of the retail price apparently. So in this case would be about 30% of the RRP of a bottle of E-liquid. Of R290, R87 would go to the Man........

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## Timwis (28/2/20)

GSM500 said:


> It is 75% of our current ciggie tariff which is around 40% of the retail price apparently. So in this case would be about 30% of the RRP of a bottle of E-liquid. Of R290, R87 would go to the Man........


Got you, thanks! that actually means compared to the UK your tax on cigarettes is very low! If your government really understood the facts about the harm reduction of people vaping rather than smoking they would just charge standard VAT on Vaping products but dramatically increase tax on cigarettes. But then when i hear in your budget the term "so called vapes" i fear the worse for the future for South Africans when it comes to vaping!

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## Stranger (28/2/20)

@ Timwis.

When you live in the UK you have a government and an opposition. This creates a balance of sorts. here we have the ANC, as in cANCer. They pretend to operate as a first world government but in fact have a deep routed philosophy of creating wealth for themselves as compensation for Apartheid. 
They feel nothing for the common man and look for any and all means to increase the tax base. Bear in mind that we have a large portion of people who live in poverty and we have a disproportionate amount of people who are very wealthy. They see any tax as a way of reparation and will look at anything that will fill the coffers. If you can afford to vape, then you can afford the tax. This has nothing to do with tax on vaping and everything to do with another revenue stream.

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## Timwis (28/2/20)

Stranger said:


> @ Timwis.
> 
> When you live in the UK you have a government and an opposition. This creates a balance of sorts. here we have the ANC, as in cANCer. They pretend to operate as a first world government but in fact have a deep routed philosophy of creating wealth for themselves as compensation for Apartheid.
> They feel nothing for the common man and look for any and all means to increase the tax base. Bear in mind that we have a large portion of people who live in poverty and we have a disproportionate amount of people who are very wealthy. They see any tax as a way of reparation and will look at anything that will fill the coffers. If you can afford to vape, then you can afford the tax. This has nothing to do with tax on vaping and everything to do with another revenue stream.


Our media when it comes to what goes on in the rest of the world is second to none so i know about every word you wrote but as an outsider feel i have to be very careful talking about your politics and past!

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## Adephi (28/2/20)

I know I'm usually the guilty one when it comes to derailing threads but this time I'm going to ask that we keep politics out of it and stick to the topic. This has the potential of going south very quickly.

We can have very constructive conversations about this topic without the need of mudslinging.

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## M.Adhir (28/2/20)

GSM500 said:


> It is 75% of our current ciggie tariff which is around 40% of the retail price apparently. So in this case would be about 30% of the RRP of a bottle of E-liquid. Of R290, R87 would go to the Man........



Yep. So a *R360 bottle of juice* (many local brands 100ml/120ml are this price) should, by this calculation, *go up to around R470*, give or take a couple of rands.

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## Faiyaz Cheulkar (28/2/20)

there is plenty of "tax free" cigarettes available in SA, why should vaping be any different?

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## DougP (28/2/20)

Maybe somebody that uses a IQos can shortly give us a clear indication as to how much the tax will be as IQos is gonna be taxed from now.


Sent from my LYA-L09 using Tapatalk

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## Hooked (28/2/20)

Blends Of Distinction said:


> Maybe somebody that uses a IQos can shortly give us a clear indication as to how much the tax will be as IQos is gonna be taxed from now.
> 
> 
> Sent from my LYA-L09 using Tapatalk



IQOSs are sold in many supermarkets, so it's easy to check the prices now before sin tax is imposed and again after it is implemented.

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## Hooked (28/2/20)

alex1501 said:


> I fully understand and appreciate that aproach. It's almost attractive until you start thinking about it.
> 
> First, by accepting it without a fight, we accept the position that vaping is a problem and not a solution. And personally, I strongly disagree with that.
> Many people already find vaping too expensive, double that price and half of them go back to smoking.
> ...



@alex1501 Let's agree to disagree

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## alex1501 (28/2/20)

Hooked said:


> @alex1501 Let's agree to disagree



If by that you mean "you have your point of view, I have mine and the truth is somewhere in between", then yes, I'm all for it.

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## Hooked (3/2/21)

*What proposed Tobacco Bill means for vaping in South Africa*
https://www.medicalbrief.co.za/archives/what-proposed-tobacco-bill-means-for-vaping-in-south-africa/
27 Jan. 2021

"With the Control of Tobacco and Electronic Nicotine Delivery Systems Bill (2018) on the horizon, health organisations and tobacco control lobbyists are failing to acknowledge the benefits of harm reduction products such as electronic vapour products, writes Asanda Gcoyi, CEO of the Vapour Products Association of South Africa (VPASA), in _BizCommunity._

The article is part of the We Are Not Tobacco (WANT) campaign launched by VPASA. The vaping industry body seeks to differentiate electronic nicotine delivery systems (ENDS) from combustible tobacco products. This is the full article:

As the South African government moves to fast-track the final assessment of regulations to introduce legislation to regulate ENDS under the same law as smoking, the vaping industry is alarmed by the false parallel that government and anti-tobacco activists are drawing between the different products.

Accordingly, VPASA has demanded that the government appropriately differentiate electronic vapour vapour products (EVPs) from combustible tobacco, in keeping with the scientifically proven view that EVPs are a less-harmful alternative to smoking.

Properly regulated, EVPs can significantly contribute to reducing the harms associated with smoking; the very purpose for which the government seeks to tighten regulations.

Regulatory decisions should always be based on scientific facts rather than perception, ideological leanings or, even worse, misinformation.

Unfortunately, EVPs have tended to suffer from widespread misinformation, driven in no small part by anti-tobacco lobbyists and health authorities who deem EVPs as similar in danger to smoking, despite the preponderance of scientific evidence proving the contrary.

In the event, public opinion has tended to be guided by sensationalist and inaccurate media reporting rather than the evidence of, by now, countless, highly reputable research institutions across the globe who are advising governments to harness the potential of EVPs as harm-reduced alternatives to smoking and the attendant benefits flowing from that.

These institutions include Public Health England, the Royal College of Physicians, Cancer Research, Action on Smoking and Health and many others. These organisations are tied by the science that EVPs are 95% less harmful than traditional smoking, a staggering achievement.

The promulgation of the South African Bill, of course, comes in the wake of a difficult period in which the sale of vaping products was summarily banned during the country’s hard COVID-19 lockdown.

This was a missed opportunity as it could have offered smokers a safer route to meet their nicotine cravings during the ban rather than the consumption of illicit tobacco.

At the same time, it would have contributed to many more smokers switching out of their smoking habit, thus contributing to South Africa’s stated target of reducing smoking by 20%.

VPASA has consistently advised the government to carefully study the example of the United Kingdom, which is a world leader in EVP regulation. Our organisation is not anti-regulation, as some may wish to suggest. Rather, we are for sensible, measured and effective regulation, of which the UK seems to have found a workable model.

VPASA wants to see appropriate, evidence-based policies, which enable consumers to make informed decisions about their choice of nicotine products. The bill, as it stands, runs contrary to this objective.

We believe that imposing the same restrictions on all ENDS as on traditional combustible tobacco products is problematic for a number of reasons.

For one, standardised packaging and labelling for all ENDS products will restrict the dissemination of relevant educational information. The requirement for graphic health warnings standardised across all products will represent the dangers of smokers as there are no known graphics that can be displayed on EVPs.

Concealing products at point-of-sale misses an opportunity to bring awareness to smokers about the products. At the same time, banning all forms of product communication will unduly restrict the industry from communicating with smokers who wrongly believe that EVPs are equally or more harmful than smoking.

In short, vaping and EVPs offer safer nicotine-delivery products to millions of South African smokers who are at risk of developing smoking-related diseases.

Preventing access to vaping products and stigmatising them in the same way as combustible tobacco products is not good regulatory practice. It denies people their right to make an educated – and less harmful – choice."

Article in _BizCommunity_ – What does the proposed tobacco bill mean for vaping in SA? (Open access)

Website of the Vapour Products Association of South Africa (VPASA) (Open access)

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## CMMACKEM (4/2/21)

As someone who vapes at least 30mls a day(Works out to around R150 a day?), I may as well go back to smoking 10 - 20 cigarettes' a day(R20-R40).

Thank goodness I have stocked up and by the end of this week, I should have around(What would work out to) 90 bottles of 100ml.

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## Timwis (4/2/21)

CMMACKEM said:


> As someone who vapes at least 30mls a day(Works out to around R150 a day?), I may as well go back to smoking 10 - 20 cigarettes' a day(R20-R40).
> 
> Thank goodness I have stocked up and by the end of this week, I should have around(What would work out to) 90 bottles of 100ml.


I would really look at going the DIY route before even considering the old enemy!

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## vicTor (4/2/21)

even One Shots

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## Timwis (4/2/21)

CMMACKEM said:


> As someone who vapes at least 30mls a day(Works out to around R150 a day?), I may as well go back to smoking 10 - 20 cigarettes' a day(R20-R40).
> 
> Thank goodness I have stocked up and by the end of this week, I should have around(What would work out to) 90 bottles of 100ml.


Seems they tax the wrong thing the price you quoted is £2 for 20 cigarettes in the UK 20 cigarettes are now over £10!

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## Timwis (4/2/21)

Timwis said:


> Seems they tax the wrong thing the price you quoted is £2 for 20 cigarettes in the UK 20 cigarettes are now over £10!


They haven't been as low as £2 since i was a kid and i am 50 next month!

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## Stranger (4/2/21)

Also, if I had to buy commercial juices for my daily fix, I would not be able to afford it. DIY is the way to go for me. Even some one shots I am getting comes out at around R50 for 100ml.
https://www.ecigssa.co.za/is-my-math-right.t71081/

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