Ministry of Finance wants 50% tax on e-cigarette atomizer

The Ministry of Finance has maintained its proposal to impose a 50% Most-Favored Nation (MFN) tariff on electronic atomizer, the device used to heat up liquid solution used for vaping.

In a recent response to the Ministry of Health, which has advised the government to ban the imports of e-cigarettes due to health concerns, the finance ministry said that as the code of e-cigarette products were included in Vietnam’s list of exported and imported goods, it needed to impose a tax on such products in case the government allows their import in the future.

The MFN is what countries promise to impose on imports from other members of the World Trade Organization.

Vietnam now imposes a 50% MFN tariff on the liquid solution used in e-cigarettes and on the e-cigarettes in which the atomizer and the solution are inseparable.

The tariffs, however, have mostly no practical impact as Vietnam does not allow the imports of e-cigarette components. These products, however, are widely popular in the country, mostly because of smuggling.

The Ministry of Industry and Trade has reminded the finance ministry that atomizers should be regulated as electronic products already subject to an MFN tariff of 5% according to Vietnam’s commitments to the WTO.

But the finance ministry said that e-cigarette components were new products that did not exist when Vietnam made commitments with the WTO.

Government officials estimate that smoking is the cause of over 40,000 deaths in Vietnam every year.

Experts say that the rising popularity of e-cigarettes means they should be regulated to prevent smuggling.