The government has announced plans to tax the emerging heat not burn (HNB) tobacco category.

A new tax category will be created and the duty will be calculated based on the weight of the tobacco inside the product.

Draft legislation will be published this summer for technical consultation and the change will be legislated in the Finance Bill 2018-19.

The duty rate will be announced at Budget on the same basis as other tobacco products. The government will also consider products already on the market paying duty under the current rules, it added. 

A consultation setting out potential changes to the tobacco duty regime, in response to the development of HNB tobacco products, was published last year and closed on 12 June 2017.

Philip Morris, which launched its HNB IQOS device in the UK last year, said it welcomed the recognition that heated tobacco was “fundamentally different” from combustible tobacco.

“Whilst the rates are yet to be set, we believe taxation should be proportionate to harm and heated tobacco should therefore be taxed at a lower rate,” a spokesman added.

However, Simon Clark, director of smokers’ lobby Forest, slammed the move: “Heated tobacco may not be as safe as electronic cigarettes (e-cigs) but current evidence suggests there is almost certain to be a reduction in risk for cigarette smokers.

“Why would any government want to undermine the future of a product that may encourage smokers to quit voluntary and without coercion?”

“Many smokers have tried e-cigs but don’t like them. The attraction of heated tobacco is that it fills the gap between combustible cigarettes and e-cigarettes which don’t contain tobacco.

“Heated tobacco products are still in their infancy. Adding excise duty will almost certainly deter many smokers from switching to a potentially safer device.”

HNB products generate a nicotine-containing vapour that yields less smell and on average less than 10% of the levels of harmful constituents found in cigarette smoke, meaning that they pose much less of a health risk to smokers than conventional cigarettes, health experts have claimed.

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