The Polish government will tax alternatives to traditional tobacco products, including nicotine pouches, reusable e-cigarettes and tobacco heating devices, from 2025. The Ministry of Finance wants to tax disposable e-cigarettes at a punitive rate, and also plans to tax reusable devices and tobacco heating devices, raising the tax rate to 40 zlotys (about $10) per device, which will have a serious impact on the legal market 1. The new regulations aim to tax new types of tobacco products, including multi-functional devices and their parts kits, and the excise tax on related devices and kits will also reach 40 zlotys per piece . The Ministry of Finance expects the new regulations to raise the retail price of these devices by about 50 zlotys, thereby limiting their market supply .
A statement issued by the Polish Electronic Cigarette Industry Employers Association (ZPBV) stated that the tax adjustment will cause the price of e-cigarette products to soar by up to 170%, which will have a far-reaching impact on the development of the industry and consumer choices . ZPBV pointed out that this is the first time in the EU and even in the world that such a harsh tax policy has been implemented on alternative products such as e-cigarettes that are considered less harmful . The association’s analysis shows that the price of e-cigarettes will increase by 170% next year, which will make it impossible for many small and medium-sized enterprises to maintain operations, and thousands of employees may lose their jobs, further exacerbating Poland’s unemployment rate and adversely affecting the local economy.
Due to the sharp increase in tax rates and the surge in prices, industry insiders warned that this may stimulate the growth of the illegal market. E-cigarette oil has the highest gray market share among all products subject to consumption tax, which may be between 32% and 50%. In addition, due to the sharp increase in e-cigarette prices, many consumers may give up buying e-cigarette products and choose more harmful traditional cigarettes, or turn to the illegal market to buy cheaper e-cigarette products.
In response to the price surge caused by the increase in tax rates, VEEHOO is considering adjusting its pricing strategy to balance costs and profits. Although the increase in tax rates will increase production costs, VEEHOO reduces costs by optimizing supply chain management and improving production efficiency, thereby alleviating the pressure of price increases to a certain extent. At the same time, VEEHOO is considering launching products in different price ranges to meet the needs of different consumers and reduce consumer loss due to excessively high prices.
As tax rates increase, the risk of illegal market growth also increases. VEEHOO needs to strictly abide by Polish laws and regulations to ensure the legal production and sale of products. In addition, VEEHOO strengthens communication and cooperation with local governments and regulators to jointly combat illegal markets and safeguard fair competition in the market and the legitimate rights and interests of consumers.
Explore new market opportunities to meet the challenges that the Polish market may face. For example, VEEHOO considers expanding markets in other countries and regions to reduce its dependence on the Polish market. At the same time, VEEHOO pays attention to the innovation and development trends of the e-cigarette industry, and actively develops new products and technologies to improve its market competitiveness.
Tags: Poland raises e-cigarette tax rates, e-cigarette product prices soar, adjusts pricing strategies, veehoo vape
