FEDERAL EXCISE TAX ON VAPING PRODUCT

IMPORTANT:

DEAR OUR VALUED CUSTOMERS

Federal Government is implementing excise tax on Vaping Products.

Excise duty on vaping products

An excise duty on vaping products, as announced in Budget 2022, was implemented on October 1, 2022 through the introduction of a new excise duty framework. The excise duty applies to vaping substances that are manufactured in Canada or imported and that are intended for use in a vaping device in Canada.

The tax is $1 per 2 mL for the first 10 mL in any sealed container (bottle, pod, etc.), and $1 per 10 mL for additional liquid in the container. That adds $7 to the price of a 30 mL bottle of e-liquid, $10 to a 60 mL bottle, and $14 to a 100 mL bottle. A 3-pack of 2 mL pods would is taxed at $3, because each sealed pod is taxed separately and the minimum tax on any individual container is $1.

What’s Next? Above is Federal Excise Tax, Provincial/Territory Excise tax may be introduced in near future

 

FEDERAL EXCISE TAX ON VAPING PRODUCT

What is excise tax?

On April 7, 2022, the Federal Government announced excise duty on vaping products. This excise duty (or excise tax) applies to any vaping substances sold in Canada that are intended for use in a vaping device.

All vaping products that are meant for sale in the Canadian duty-paid market are required to have an excise stamp affixed to the product as proof that duties have been paid. Canadian manufacturers and importers are responsible for applying excise stamps to vaping products that are intended for sale in the Canadian duty-paid market and remit payments to the Canada Revenue Agency (CRA).

When was the excise tax implemented?

Effective October 1, 2022, manufacturers and importers of vaping products sold at retail stores are required to be licensed or registered with the Canada Revenue Agency (CRA).

For retailers, the excise tax regulations came into effect on January 1, 2023. As a retailer, we were given a grace period to sell unstamped products until December 31, 2022. Starting January 1, 2023, all products containing vaping substances sold in the store (including e-commerce sales) require a vaping excise stamp affixed to the product. Full transition to only excise stamped products occurred on  December 31, 2022. 

How much will the excise tax increase the prices, and how will they be calculated?

The duty is calculated based on the liquid volume of vaping substance contained in a single container (in mL). At this time, duties are charged and collected on the Federal level.

Federal Taxes Calculations

  • For the first 10 mL of vaping substance, a duty is applied at a rate of $1.00 per 2 mL of the vaping substance.

  • For each additional 10 mL of vaping substance thereafter, a duty is applied at a rate of $1.00 per 10 mL of the vaping substance.

Example 1:

  • For a closed pod pack (3 pods cartridges), the duty payable will be CAD $1 per 2 mL, which equates to an increase of $3 per closed pod pack.

 Example 2:

  • A 60 mL bottle of e-liquid at Federal excise duties would be $1 per 2 mL for the first 10 mL, which equates to $5. The remaining 50 mL would be $1 per 10 mL which equates to another $5.

  • The total Federal excise duties would be $10. If/when Provincial or Territorial duties are implemented, this would effectively double to $20 of excise tax.

It is important to note that the Government has invited the Provinces and Territories to participate. In the event that the Provinces or Territories opt into the excise tax, a new Provincial/Territorial stamp will need to be applied on all products and the duty payable will effectively double.

What products are affected by excise tax?

Vaping products that are vaping devices that contain vaping substances or that are vaping substances in immediate containers. Any vaping hardware that is sold separately from the vaping substance will not be impacted.

  • Taxed products: closed pods, disposable vapes, e-liquid bottles, or bottles containing any component intended for vaping (nicotine, VG, PG, flavouring).

  • Products that will not be taxed: device/battery for closed pod systems and any vaping hardware or mods (including chargers, empty cartridges, tanks, and other accessories).

 

Message from Mango Vapes:

Hi Friends, This is Jai from Mango Vapes.

We are working diligently with Vape Manufacturers and Vendors to minimize the impact of excise tax for Vaping products we carry.

We had until the end of 2022 to exhaust unstamped inventory; As of Jan 1 2022, all Vaping products have a duty paid stamp on the product

Again, I am so sorry for these changes. We at Mango Vapes took great pride and joy in providing friendly service and great products to our customers at reasonable price and this announcement of excise tax disappoint us greatly.

Sincerely from Jai