According to BIZNES on August 9, the Polish Ministry of Finance plans to increase taxes on vape oils, which will make vape oils more expensive than traditional cigarettes next year.
Domestic manufacturers strongly oppose the plan, arguing that it will lead to the growth of the gray market and hit the domestic small and medium-sized enterprise market at the legal level. The government’s sudden increase in tax burden has given them very little time to prepare, only a few months.
The Ministry of Finance announced in July that it would significantly increase taxes on tobacco products and their substitutes (including vape oils) starting in 2025. This will overturn the previously stipulated tax rules from 2021 to 2027.
According to the Ministry of Finance’s estimates, the retail price of a pack of 20 cigarettes will increase by about 2.7 to 3.1 zlotys (about RMB 4.89-5.61) each year between 2025 and 2027. The price will be close to 21 zlotys (about 38.03 yuan) next year and close to 27 zlotys (about 48.9 yuan) by 2027. The price of vape oil is expected to rise by about 4.4 to 5 zlotys (about 7.97-9.06 yuan) each year, and will exceed 23 zlotys (about 41.65 yuan) next year, and will be close to 33.5 zlotys (about 60.67 yuan) three years later.
Experts point out that this will encourage consumers to choose more harmful traditional cigarettes instead of milder alternatives.
vape oil producers emphasize that drastic and sudden tax increases will lead to the growth of the gray market. According to data from Almares Research, the gray share of the traditional tobacco market has been declining since 2016 and has fallen to a historical low of less than 5% by 2023. Now this trend may be reversed.
The Ministry of Finance expects that after the implementation of the planned tax increase, tax and VAT revenues from tobacco products will reach 420 million zlotys (about 760 million yuan) next year, 430 million zlotys (about 790 million yuan) in 2026, and 400 million zlotys (about 720 million yuan) in 2027.
Experts point out that if this does lead to the growth of the gray market for vape oils, the state budget will not receive the expected revenues. In fact, these revenues may be less than before the tax increase.
The industry also pointed out that the rapid and large tax increase will hit domestic small and medium-sized enterprises that produce vape oils. The government’s sudden announcement has caused confusion in the market, and many companies have suspended their development plans as a result.
Veehoo vapes has always been committed to providing alternative smoking products to help smokers get rid of their dependence on traditional cigarettes. However, the recent Polish government plan to increase taxes on vape oils may have a negative impact on the vape industry and consumers.
It is reported that this tax adjustment will gradually make the price of vapes exceed that of traditional cigarettes, which may cause consumers to turn to more harmful smoking methods. Experts also warned that this trend towards traditional cigarettes could fuel the development of the illegal market, reversing the current trend of a continued decline in the gray market share of traditional tobacco.
Veehoo vapes expressed concern about the Polish government’s tax adjustment plan. Reasonable tax policies should balance the relationship between tax revenue and public health, while excessive tax increases may have a negative impact on consumer choices and market order.
In addition, this drastic and sudden tax increase may also have an impact on domestic small and medium-sized enterprises that produce vape oils. Veehoo vapes calls on the government to fully consider the development needs of the industry and the right of consumers to choose when formulating tax policies, and avoid unnecessary interference and instability in the market.
Tags: Poland plans to significantly increase vape taxes，The Polish Ministry of Finance plans 2025