It was reported on November 1 that with the official collection of e-cigarette consumption tax today, the national unified e-cigarette transaction management platform updated the tax-included wholesale price and suggested retail price of the national standard products on the platform in the early morning of the 1st.
Electronic cigarettes have officially entered the same taxation category as cigarettes.
On October 25, the Ministry of Finance, the General Administration of Customs, and the State Administration of Taxation jointly issued an announcement on the collection of consumption tax on electronic cigarettes, including electronic cigarettes in the scope of consumption tax collection, and adding electronic cigarette sub-items under the tobacco tax item. Electronic cigarettes are subject to an ad valorem rate-setting method to calculate and pay taxes. The tax rate for the production (import) link is 36%, and the tax rate for the wholesale link is 11%.
Brands that are currently available on the trading platform then urgently calculate various prices after taxation, and finally officially update to the platform on November 1.
From November 1st, electronic cigarettes will enter the era of tax-included sales, which also means that the price will also fluctuate to a certain extent.
After the basic understanding of the tax increase and price increase, the shop owner also fell into contemplation. On the one hand, the cost of purchasing goods has actually increased, and how to sell the final retail price has become a topic of concern for shop owners.
If it is sold at the previous price and the purchase price has risen, part of the tax increase cost will fall on the owner. Once the gross profit is too low, the e-cigarette store operated by a single category will not be able to operate normally.
If it is sold according to the wholesale price increase, the previous retail price is bound to increase. It is okay to sell fruit-flavored electronic cigarettes, but now there are only national standard tobacco flavors. There are still fruit-flavored and illegal disposable fruit electronic cigarettes in the market. Under such circumstances, the difficulty of selling tobacco flavors can be imagined if they want to increase the price and sell them.
In fact, brands have also made concessions, not all relying on price increases to cope with taxes.
The Securities Times analyzed that compared with the previous one, although the terminal price of selling a box of pods has risen, the revenue of the brand electronic cigarette factory has decreased by nearly 8 yuan, the retailer’s revenue has decreased by more than 5 yuan, and the gross profit margin has dropped by a large margin. It’s all about paying taxes and reducing consumer burdens.
At present, the processing link does not seem to be affected, but after the gross profit margin of brand owners is greatly reduced, it is inevitable that they will renegotiate with the upstream and transfer costs. The industry needs to overcome the difficulties together.
In this process, first-tier brands with higher sales volume may have the upper hand, and can renegotiate processing costs, and the average production cost is relatively low, while second-tier brands with lower sales volume may be burdened with relatively large cost pressures.
Tax collection is not a simple addition of numbers. Due to different collection stages and different bases, there are also some implicit tax burdens that need to be considered.
The tax rate for the production (import) link of the electronic cigarette factory is 36%, and the tax rate for the wholesale link is 11%. When the consumption tax is collected, 12% of the amount is levied as an additional tax, including urban construction, education and local education, which are hidden costs. The ex-factory price of the brand side should increase by 40.32%.
The consumption tax levied on the wholesale link is 11%, and 12% is an additional tax levied on the basis of the consumption tax, and the cost of the wholesale link has risen by 12.32%.
The price of retailers taking goods from the platform has risen after the above two links, and the cost has risen sharply, and the price of wholesale goods has also risen accordingly.
Therefore, in the end, it seems that the price increase is jointly undertaken by the brand, the store owner and the consumer, which is a relatively reasonable plan. The store owner should also rationally view the changes in the gross profit margin of the retail side.
The retail performance after the e-cigarette tax is levied will be the focus of November.
Due to the fact that not all approved brands have been listed on the trading platform at present, and some regions have been affected by the epidemic, they have not let go of their hands and feet to book the national standard, and many users have not started to try the national standard products. Therefore, the taxation and The price adjustment is actually not bad news.
First, there are nearly 30,000 licensed shop owners, but due to various reasons, the production capacity and reservations of some brands are not full, and the market capacity is still large.
The second is that users do not have much perception of the current price of the national standard. At this time, taxation and price increases are equivalent to starting everything from scratch, and the owner also has a reasonable reason to increase the price.
After the taxation of electronic cigarettes, its identity is officially at the same level as cigarettes, and it is also a product that officially pays taxes for the country, and there will be less criticism from the outside world.
At the same time, the implementation of the national standard of electronic cigarettes will provide users with products of qualified quality, and the implementation of electronic cigarette management measures will ensure that the entire industry is licensed to operate and only sell national standard products.
Through the above three steps, the identity of e-cigarettes has been formally established. In the long run, this is undoubtedly beneficial to the industry. In the short run, it will indeed experience pain and reshuffle.
Source: Blue Hole New Consumption
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