Can SA Vapers and Retailers afford Vape Tax?

[CaliGuy]

I have spent some time in Bali, Indonesia which has a unexpectedly large vaping community and industry.

Having visited several vape stores I had time to discuss their vape laws and any potential vape bans. From these discussions I am starting to think that any South Africa regulatory law will not just be about Nic/Harm reduction. On the contrary I’m more concerned about our government is aiming for an all out Vape Sin Tax which could be in the region of 40% similar to what happened in Balu.Which means we the consumer will pay this tax on almost all vaping related items.

Imagine your favourite local eLiquid going from R240 to R330 over night. This obviously raises a concern as to whether our local vape retailers and eLiquid manufactures consider the vaping consumer and reduce their margins to reduce the overall pricing increase and impact this Tax would have on vaping as a whole.

Luckily for Bali’s vape community their local eLiquid and Hardware prices was already low - R80 to R100 for a 60ml, after the Tax it went up to R110 to R150 per 60ml for example.

Taking into account that currently Bali’s currency is a 1:1 conversion with the Rand, it’s safe to say the average vape product costs 20% to 30% less in Bali and this after the added 40% Vape Tax. Some of the vape stores I spoke to here confirmed their margins are not that high as they would loose customers so the prices stay low.

What would happen in SA if we had any form of Sin Tax added, could we be in for a shocker 40% increase?

If this was the case many people would simply stop vaping, vape stores would loose customers and likely see many go out of business. The industry as a whole would take serious knock unless we have the ability to at least maintain the current prices and possiably absorb the Tax increase.

In the US they have imposed a Tax on eLiquid per ML, no problem because the consumer is the one footing the increase however it has had a impact on vape shops and retailers alike.

No alarms bells yet for SA as we simply don’t know what our Government will end up doing. So now we wait, hopefully we are all prepared for what may come our way.

Read the US article here:
https://www.thestranger.com/slog/20...shington-passes-new-sin-tax-on-vapor-products

 

[Elmien]

I don't think the impact this tax increase will have on the economy is taken into consideration. The vaping industry has created a lot of business and jobs. It is growing every day. Having to pay such a large amount on tax alone will discourage those who already vape and also those who are considering it from buying products. We are already paying enormous amounts for tax on everything and seeing little benefit from it. The unemployment rate is already ridiculously high and losing more jobs due to vape shops having to close because of an unnecessarily high tax on their products will have even more people without jobs.

 

[RichJB]

If this was the case many people would simply stop vaping

That's the whole point of a sin tax. They have tracked this in the US and elsewhere. Every time the cost of a pack of cigs goes up, consumption goes down, i.e. people either smoke less or they quit altogether. Considering that is what govt is aiming to achieve, it is working very well.

 

[ARYANTO]

Vaping will go underground , we have good mixers , get juice from them , here is enough clever Trevors who can start their own mnf plants . Make it basic so I can just pack it off to you and 3 days later TCG drops it off again . Get 3 or 4 no nonsense mods ,atties and coils . Do like in the SWART GEVAAAR days stock up and keep vg, pg,nic and some flavour , pack it in boxes . komaan boere maak altyd n plan.
Not perfect but it can work.

 

[Jean claude Vaaldamme]

Chinatown juice will still be cheap, problem solved

 

[Christos]

Chinatown juice will still be cheap, problem solved

I guess that explains your mood swings and irrational need to "karate met almal"

 

[Jean claude Vaaldamme]

I guess that explains your mood swings and irrational need to "karate met almal"

No Im done fighting. Got an pm regarding the good manners thread, and I dont know why, but the person spend half the pm telling me how great a certain mod is, how much it cost and how its hand crafted etc. He had his first on its way and explained that membrs with these mods are the elitist of this forum and we should respect them.

Toe skeur ek my hol

So now I just keep quiet, too painfull.
Sal maar hier in my mou lag

 

[Humbolt]

membrs with these mods are the elitist of this forum and we should respect them.

No ways

 

[Pho3niX90]

What I have seen in Germany is that juices get sold as "mixes", they tend to be 3 parters, your base, your flavorants, and nic if so desired. Somewhat of a oneshot that mixes around 50-60ml

If taxes do go up that high, I think most vape shops will close down as the industry will start to shrink, where majority of people will move into DIY.

So my current stand is that DIY is the way of the future, most people cannot even afford to buy juices anymore as it is. When price fixing stops, only then will it become affordable for the masses again, so maybe the taxing has a silver lining?

 

[RichJB]

The industry has experienced deflation as economies of scale have kicked in. When I started vaping in 2016, the standard price for a local juice was R150 for 30ml. Today, it's just over half that. For DIYers, TFA, FA and FW flavours were R40 each. They are now R25 and you can find them for as low as R15. Nicotine was R200 a bottle, it's now around R100. Batteries were R150-200 each, you can now get them for R100-130. Dual cell mods started at around R1200, you can now get them for as low as R650. If a moderate vaping tax stops people vaping because it's no longer affordable, then they certainly weren't vaping in 2016.

Any price increase will cause a small percentage of marginal users to drop out, that is established economic fact. However, it will not kill an industry. In Australia, cigarettes are around R400 a pack and there is still a viable market for tobacco. When people are addicted to something, they find the money to afford it. That, too, is established economic fact.

 

[RenaldoRheeder]

Any price increase will cause a small percentage of marginal users to drop out, that is established economic fact. However, it will not kill an industry. In Australia, cigarettes are around R400 a pack and there is still a viable market for tobacco. When people are addicted to something, they find the money to afford it. That, too, is established economic fact.

I can vouch for the cigarette prices in Australia. I made a mistake once and took to little cigarettes with and had to pay the price when I ran out. But as you said - and my dad always used to say as well: "not matter how much they tax cigarettes and alcohol, it will always be a bargain to those that use it".


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[CaliGuy]

Meet loads of Australians in Bali, those that smoke and drink all complained about their high Sin Tax. The solution for those I meet was to come to Bali once or twice a year and then the stock up on smokes at Duty Free as the Aussie $ is 10:1 in Bali so for them it’s just super cheap as a holiday and shopping experience.

Not the ideal solution and by no means going to last a whole year, but agree people will always find a way and the smoker Aussies I meet said the smoke a little less back at home, kind of a budget thing.

@RichJB thanks for your input from your long term experience with vaping. Easy to agree with your sentiment about prices coming down over the years as the industry and customer demand has grown. We could see that reversed as prices go up beyond the retailers and suppliers annual increases linked to a decrease in demand as people move away from vaping or give it a skip all together due to taxation or an outright ban on eLiquid based Nicotine.

Guess we won’t know until it happens, Bali for example managed to continue thanks to tourist business while Hong Kong for example has a massive shrinkage of vapers and stores as they can no longer sell any eLiquids with Nicotine so lost the markets interest all together. If anything the Chinese prefer smoking and I saw more Ciga-like alternative combustion devices than vapers and even then they were few and far between.