After banning the sale of fruit flavor, Wang Yan (not his real name)'s electronic cigarette business plummeted. On the afternoon of October 25, he received the news that electronic cigarettes were subject to consumption tax. The Ministry of Finance, the General Administration of Customs and the State Administration of Taxation issued the Announcement on the Collection of Consumption Tax on Electronic Cigarettes (hereinafter referred to as the Announcement). It is mentioned that the tax rate of the production (import) link is 36%, and the tax rate of the wholesale link is 11%. From the operation of the national unified trading platform to the implementation of the national standard, the brutal growth of electronic cigarettes has gradually been brought into the regulatory vision. The industry is transitioning from disorderly competition to survival of the fittest, but in the eyes of many retailers, the eve of the "winter" came. Although 36% of the consumption tax and 40% of the profits are unexpected, in the eyes of many practitioners, the taxation of electronic cigarettes is "boots finally landed". The Announcement mentioned that electronic cigarettes will be included in the scope of consumption tax collection, and electronic cigarettes will be added under the tobacco tax. With regard to the application of tax rates, electronic cigarettes are subject to the method of ad valorem taxation. The tax rate of the production (import) link is 36%, and the tax rate of the wholesale link is 11%. The Announcement shall be implemented as of November 1, 2022. In terms of tax pricing, in the face of different situations, the Announcement clearly states that taxpayers who produce and wholesale electronic cigarettes shall pay tax according to the sales volume of the production and wholesale electronic cigarettes. If taxpayers in the production process of electronic cigarettes sell electronic cigarettes on a commission basis, the tax shall be calculated according to the sales volume of dealers (agents) sold to electronic cigarette wholesale enterprises. Taxpayers who import electronic cigarettes shall calculate and pay tax according to the constituent taxable price. If taxpayers engaged in the processing business of electronic cigarettes in the production process of electronic cigarettes, the sales of electronic cigarettes with trademarks and the sales of electronic cigarettes processed on behalf of others shall be accounted for separately; If they are not accounted separately, the consumption tax shall be paid together. As for the collection of consumption tax on electronic cigarettes, the Ministry of Finance said that it is to improve the consumption tax system, maintain the fairness and unity of the tax system, and better play the role of consumption tax in guiding healthy consumption. It is also publicly reported that before the Announcement, electronic cigarettes were regarded as ordinary consumer goods, and the tax rate was generally around 13%. "It can be seen from the Announcement that the state has gradually promoted the regulation of the electronic cigarette market, and still retains the space for further tax levy." Xie Zongbo, a financial writer and Australian senior certified public accountant, analyzed the Beijing Business Daily reporter and said that China's traditional tobacco consumption tax collection method is "production link ad valorem+wholesale link ad valorem". According to the current tax rate, in the industrial production link, the tax rate of Class A cigarettes is 56% plus 0.003 yuan/cigarette, and that of Class B cigarettes is 36% plus 0.003 yuan/cigarette. For the commercial wholesale of cigarettes, the tax rate is 11% plus 0.005 yuan/cigarette. Xie Zongbo said that after calculation, China's comprehensive cigarette tax rate is 66.6%. It can be seen from the regulations issued by the three departments that the consumption tax on electronic cigarettes is levied by reference to Class B cigarettes, and the "specific tax" is reduced, which can be said to be slightly lower than the tax burden on Class B cigarettes. Zhao Jing (not his real name) was once an employee of Hebei Branch of an electronic cigarette company. In an interview with a reporter from Beijing Business Daily, Zhao Jing said that the profit of a package of cigarette sticks and cigarette bombs could basically reach