Rong Zheng, Lingyun Meng, Shidong Su, Mark Goodchild
{"title":"电子烟行业如何应对税收调整?来自中国的证据。","authors":"Rong Zheng, Lingyun Meng, Shidong Su, Mark Goodchild","doi":"10.18332/tid/186355","DOIUrl":null,"url":null,"abstract":"<p><strong>Introduction: </strong>China enacted an excise tax on e-cigarettes in November 2022, which offers a distinctive opportunity to examine the industry's reactions to this fiscal adjustment. This study delves into the industry's pricing strategies following the introduction of the excise tax, facilitating a thorough assessment of the subsequent impact on market dynamics and the government's revenue streams.</p><p><strong>Methods: </strong>We developed a TaXSiM model specifically tailored for e-cigarettes in China by integrating the country's e-cigarette tax framework. Our approach involved leveraging market data obtained from a representative product, the RELX Phantom Series, to ensure the model's effectiveness and relevance.</p><p><strong>Results: </strong>The excise implementation of 2022 significantly heightened the tax burden on e-cigarettes, marking an increase of approximately 150 RMB per device and 19 RMB per cartridge. Despite these financial pressures, electronic cigarette firms exemplified by RELX, strategically endeavored to sustain competitiveness. Their approach involved initially implementing a 'Razor blade model' and eventually a 'comprehensive under-shifting' strategy, which mitigated the health impact of the tax hike, resulting in a relatively minor decline in sales while amplifying the impact on tax revenue. However, this strategic pricing maneuver came at a cost, as it led to a substantial decrease in profits, and therefore expedited a reshuffling of the industry by compelling smaller brands to leave the market rapidly.</p><p><strong>Conclusions: </strong>To effectively curb the use of e-cigarettes through tax policies, it is advisable to relocate the imposition of excise taxes on electronic cigarettes to the retail stage. This shift aims to narrow the scope for industry-level pricing strategies. Furthermore, this approach should be coupled with the introduction of an additional specific tax, strategically crafted to accentuate the health-related benefits associated with the excise taxation on electronic cigarettes.</p>","PeriodicalId":23202,"journal":{"name":"Tobacco Induced Diseases","volume":null,"pages":null},"PeriodicalIF":2.2000,"publicationDate":"2024-05-09","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://www.ncbi.nlm.nih.gov/pmc/articles/PMC11080932/pdf/","citationCount":"0","resultStr":"{\"title\":\"How does the e-cigarette industry respond to tax adjustments? Evidence from China.\",\"authors\":\"Rong Zheng, Lingyun Meng, Shidong Su, Mark Goodchild\",\"doi\":\"10.18332/tid/186355\",\"DOIUrl\":null,\"url\":null,\"abstract\":\"<p><strong>Introduction: </strong>China enacted an excise tax on e-cigarettes in November 2022, which offers a distinctive opportunity to examine the industry's reactions to this fiscal adjustment. This study delves into the industry's pricing strategies following the introduction of the excise tax, facilitating a thorough assessment of the subsequent impact on market dynamics and the government's revenue streams.</p><p><strong>Methods: </strong>We developed a TaXSiM model specifically tailored for e-cigarettes in China by integrating the country's e-cigarette tax framework. Our approach involved leveraging market data obtained from a representative product, the RELX Phantom Series, to ensure the model's effectiveness and relevance.</p><p><strong>Results: </strong>The excise implementation of 2022 significantly heightened the tax burden on e-cigarettes, marking an increase of approximately 150 RMB per device and 19 RMB per cartridge. Despite these financial pressures, electronic cigarette firms exemplified by RELX, strategically endeavored to sustain competitiveness. Their approach involved initially implementing a 'Razor blade model' and eventually a 'comprehensive under-shifting' strategy, which mitigated the health impact of the tax hike, resulting in a relatively minor decline in sales while amplifying the impact on tax revenue. However, this strategic pricing maneuver came at a cost, as it led to a substantial decrease in profits, and therefore expedited a reshuffling of the industry by compelling smaller brands to leave the market rapidly.</p><p><strong>Conclusions: </strong>To effectively curb the use of e-cigarettes through tax policies, it is advisable to relocate the imposition of excise taxes on electronic cigarettes to the retail stage. This shift aims to narrow the scope for industry-level pricing strategies. Furthermore, this approach should be coupled with the introduction of an additional specific tax, strategically crafted to accentuate the health-related benefits associated with the excise taxation on electronic cigarettes.</p>\",\"PeriodicalId\":23202,\"journal\":{\"name\":\"Tobacco Induced Diseases\",\"volume\":null,\"pages\":null},\"PeriodicalIF\":2.2000,\"publicationDate\":\"2024-05-09\",\"publicationTypes\":\"Journal Article\",\"fieldsOfStudy\":null,\"isOpenAccess\":false,\"openAccessPdf\":\"https://www.ncbi.nlm.nih.gov/pmc/articles/PMC11080932/pdf/\",\"citationCount\":\"0\",\"resultStr\":null,\"platform\":\"Semanticscholar\",\"paperid\":null,\"PeriodicalName\":\"Tobacco Induced Diseases\",\"FirstCategoryId\":\"3\",\"ListUrlMain\":\"https://doi.org/10.18332/tid/186355\",\"RegionNum\":4,\"RegionCategory\":\"医学\",\"ArticlePicture\":[],\"TitleCN\":null,\"AbstractTextCN\":null,\"PMCID\":null,\"EPubDate\":\"2024/1/1 0:00:00\",\"PubModel\":\"eCollection\",\"JCR\":\"Q2\",\"JCRName\":\"PUBLIC, ENVIRONMENTAL & OCCUPATIONAL HEALTH\",\"Score\":null,\"Total\":0}","platform":"Semanticscholar","paperid":null,"PeriodicalName":"Tobacco Induced Diseases","FirstCategoryId":"3","ListUrlMain":"https://doi.org/10.18332/tid/186355","RegionNum":4,"RegionCategory":"医学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":null,"EPubDate":"2024/1/1 0:00:00","PubModel":"eCollection","JCR":"Q2","JCRName":"PUBLIC, ENVIRONMENTAL & OCCUPATIONAL HEALTH","Score":null,"Total":0}
How does the e-cigarette industry respond to tax adjustments? Evidence from China.
Introduction: China enacted an excise tax on e-cigarettes in November 2022, which offers a distinctive opportunity to examine the industry's reactions to this fiscal adjustment. This study delves into the industry's pricing strategies following the introduction of the excise tax, facilitating a thorough assessment of the subsequent impact on market dynamics and the government's revenue streams.
Methods: We developed a TaXSiM model specifically tailored for e-cigarettes in China by integrating the country's e-cigarette tax framework. Our approach involved leveraging market data obtained from a representative product, the RELX Phantom Series, to ensure the model's effectiveness and relevance.
Results: The excise implementation of 2022 significantly heightened the tax burden on e-cigarettes, marking an increase of approximately 150 RMB per device and 19 RMB per cartridge. Despite these financial pressures, electronic cigarette firms exemplified by RELX, strategically endeavored to sustain competitiveness. Their approach involved initially implementing a 'Razor blade model' and eventually a 'comprehensive under-shifting' strategy, which mitigated the health impact of the tax hike, resulting in a relatively minor decline in sales while amplifying the impact on tax revenue. However, this strategic pricing maneuver came at a cost, as it led to a substantial decrease in profits, and therefore expedited a reshuffling of the industry by compelling smaller brands to leave the market rapidly.
Conclusions: To effectively curb the use of e-cigarettes through tax policies, it is advisable to relocate the imposition of excise taxes on electronic cigarettes to the retail stage. This shift aims to narrow the scope for industry-level pricing strategies. Furthermore, this approach should be coupled with the introduction of an additional specific tax, strategically crafted to accentuate the health-related benefits associated with the excise taxation on electronic cigarettes.
期刊介绍:
Tobacco Induced Diseases encompasses all aspects of research related to the prevention and control of tobacco use at a global level. Preventing diseases attributable to tobacco is only one aspect of the journal, whose overall scope is to provide a forum for the publication of research articles that can contribute to reducing the burden of tobacco induced diseases globally. To address this epidemic we believe that there must be an avenue for the publication of research/policy activities on tobacco control initiatives that may be very important at a regional and national level. This approach provides a very important "hands on" service to the tobacco control community at a global scale - as common problems have common solutions. Hence, we see ourselves as "connectors" within this global community.
The journal hence encourages the submission of articles from all medical, biological and psychosocial disciplines, ranging from medical and dental clinicians, through health professionals to basic biomedical and clinical scientists.