Colombia’s Senate has approved legislation imposing excise taxes on electronic cigarettes, vapes, and oral nicotine products during its final debate. The measure introduces a hybrid tax system that will raise retail prices by roughly 50% to curb consumption and fund healthcare infrastructure.
Hybrid Formula Drives Retail Price Increases
The approved fiscal structure applies two distinct levies to all vaping devices: a fixed tax of 2,000 Colombian pesos (COP) per milliliter of e-liquid, plus a 20% ad valorem tax based on the final consumer price.
Senator Juan Caicedo, the bill’s lead coordinator, outlined the immediate cost implications for consumers using a standard 5ml device:
“If a vape has five milliliters, it will cost an additional 10,000 pesos, plus 20% of the final value. In that sense, a device costing 50,000 pesos will now cost around 70,000 pesos.”
| Product (5ml E-liquid) | Current Retail Price | New Projected Price | Estimated Tax Increase |
|---|---|---|---|
| Standard Disposable/Pod | 50,000 COP | ~70,000 COP | +40% to 50% |
Balancing Tax Revenues Against Black Market Risks
During the debate, lawmakers weighed tax collection targets against the danger of expanding the illicit market. Senator Caicedo noted that international benchmarks guided the decision to avoid tax rates above 50%:
“We reviewed tax rates around the world because if Colombia sets rates so high that they become confiscatory, contraband will skyrocket. If prices increase by 80%, we risk fueling illicit trade across the country and driving legal imports to zero.”
Directing 1 Trillion COP to Healthcare and Sports
The legislation projects total annual tax receipts of roughly 1 trillion COP. Lawmakers explicitly earmarked these funds for social infrastructure:
- Healthcare (84%): Allocated directly to basic health insurance, preventative care programs, and departmental hospital infrastructure.
- Sports Sector (16%): Dedicated to athletic initiatives and youth sports programs.
The bill now heads to a conciliation committee between the Senate and the House of Representatives. Once both chambers approve the unified text, the president will sign the bill into law, with tax collection beginning six months after publication.
