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On 8th January 2026, China’s Ministry of Finance (MOF) and the State Taxation Administration (STA) jointly issued Announcement 2026 No.2, a formal government policy document detailing adjustments to export value-added tax (VAT) rebate rules for certain goods. This is a central government decision – not industry speculation.
Under that announcement:
- Starting April 2026, China will cancel VAT export rebates for a range of products listed in the policy’s attachment.
- The attached product list includes the customs code 2404120000, defined under China’s tariff system as “non-combustible inhalation products containing nicotine (without tobacco or reconstituted tobacco)” i.e., vaping products and e-cigarettes.
- Previously, exporters could reclaim VAT (often ~13%) on products when exporting them, effectively lowering export costs. This refund will now be eliminated entirely.
Why China is Doing This
The official reasoning from the MOF and STA (as explained at a government press briefing on 20th January) is that the export rebate system is being re-calibrated to promote higher-quality economic development and to reduce distortions caused by long-standing rebate incentives.
Key points from the government officials include:
- To curb “involution-style” competition and promote efficiency.
China’s Finance Ministry said that adjusting/cancelling export VAT rebates – particularly for sectors that have intense price-based competition – helps reduce inefficient, low-margin export competition and encourages firms to compete on quality rather than just price.
2. To support economic restructuring and “green transformation”.
Officials explicitly linked the broader export rebate changes to China’s strategic goals to promote resource efficiency, reduce pollution and carbon emissions, and foster industrial upgrading rather than simply supporting volume-based export growth.
3. To align export support with broader tax reform.
The policy is part of a wider set of VAT and export tax charges that the government is implementing in 2026 – aimed at making China’s tax system more predictable, efficient, and aligned with longer-term development plans.
What This Means
- Export costs for vaping products will rise
With the VAT export rebate removed, manufacturers and exporters can no longer reclaim a significant chunk of the VAT they pay during production. This increases the cost base for exported vape products because the VAT burden stays embedded in the product price instead of being refunded.
- Chinese vape export prices may increase
Since China is the world’s largest producer and exporter of vaping hardware and devices, removing a rebate worth ~13% of VAT is likely to increase FOB export prices unless producers absorb the cost – which most cannot indefinitely – or accept lower margins.
- Market effects could include:
Higher supplier prices for global importers: distributors and wholesalers abroad may see higher invoiced costs post-April 2026.
Pressure on smaller or low-margin factories: price competition could shrink, favouring larger, more efficient manufacturers that can better withstand increased cost burdens.
Potential supply chain adjustments: importers may reconsider sourcing strategies, timing shipments ahead of 1st April, or shifting orders – depending on pricing and inventory strategies.
Why it Might be a Good Time to Upgrade
With China set to remove VAT export rebates on vaping products from April 2026, manufacturing and export costs are likely to rise across the industry. China produces the vast majority of the world’s vape hardware, so changes at source can eventually influence global pricing.
What this means in practical terms is simple: today’s pricing won’t necessarily last forever.
We’re not talking about overnight spikes or panic buying – but as production costs increase, it’s reasonable to expect gradual price adjustments over time.
If you’ve been:
- thinking about upgrading your device
- planning to switch to something more reliable
- considering investing in a longer-lasting kit
- or stocking up on your favourite hardware
Now could be a sensible time to do it while current pricing is still in place.
Upgrading sooner rather than later can mean:
- locking in today’s price
- avoiding potential incremental increases later in the year
- getting ahead of supply shifts
- enjoying better performance and reliability now
There’s no need to rush or overbuy – but if a new device has been on your radar, this may be the right moment to make the move.
As always, we’ll continue working hard to keep prices as competitive as possible and to offer the best value we can.
