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Posted on:
29th January 2026
China have just announced that they will cancel VAT export rebates on selected product categories, starting April 1st 2026. The tax rebate on electronic cigarettes has been set at 13% for several years, which will now be going down to zero.
As you can imagine, this has caused quite the stir among Chinese manufacturers, directly affecting their bottom line. Smaller-scale manufacturers who relied on the rebate will suffer the worst, and we will likely see some of them close down because they can't balance the books.
But what does this mean for you, the UK consumer? Let’s dive into the nitty gritty of this change and look at what vape prices might look like after April 1st.
To give some context for those who aren’t clued in on the minutiae of international shipping regulations (it’s super exciting stuff, believe me). A ‘HS Code’ or Harmonized System Code is a 6-10 digit numerical system used by customs authorities to classify traded goods.
On January 9th, 2026, China’s Ministry of Finance and State Taxation Administration issued a notice that the following HS Codes will no longer be subject to the 13% VAT rebate:
China’s VAT rebates have been a longstanding policy tool, designed to boost exports of particular products. The rebate for vape goods has been going since the 2010s to support the then-burgeoning sector.
So why get rid of it now? The answer is simple: the Chinese government want a return on their investment. For years the Chinese vape industry has operated on razor-thin margins, subsidised by this rebate. This has allowed them to massively undercut foreign competition in order to get their foot in the door.
Skip to 2026 and they have well and truly kicked this proverbial door off its hinges. Over 90% of Chinese vape products are destined for export, flooding the UK market with brands like Elf Bar, Lost Mary, OXVA, Vaporesso, and so on.
Now that China has established itself as the front runners of the global vape industry, they can finally take their foot of the gas and rake in real profits.
For Chinese vape manufacturers, this change is immediate and brutal. Losing the 13% tax rebate practically overnight directly eats into their revenue. As I mentioned before, these companies already operate on thin margins, meaning they can’t simply swallow a 13% increase.
To worsen the issue, a lot of smaller companies actually factor this rebate into their bottom line, and losing it will mean operating at a loss. This leaves manufacturers with one choice: increase prices.
Let’s say these manufacturers bump up their prices by 13% and work at the same margins as before. This increase will inevitably trickle down to overseas suppliers, then to retailers like us, and finally you, the consumer.
2026 has barely started and already it’s shaping up to be the roughest year ever for UK vapers. First we learn of the new ‘UK Vape Duty’ landing in October and now this Chinese VAT situation that’s effective almost immediately.
Let’s go over the current prices of popular Chinese-made vape products and what they could look like after a 13% increase. Just to add insult to injury, I'll also factor in the Vape Duty of 22p per ml to the products it applies to, so you can see what prices might be like after October 1st 2026.
I must highlight that these prices are not set in stone, and only time will tell the true severity of these price increases. Hopefully, the larger Chinese brands like those mentioned above will be able to absorb at least some of this increased cost, giving UK retailers some breathing room.
As it stands we can’t accurately calculate these new prices, but by all accounts the increases will be massive. The effects of these changes have already reflected with increased stockpiling from wholesalers and consumers.
It’s clear that the days of cheap Chinese vape imports are numbered. The ‘race to the bottom’ on price among Chinese vape manufacturers has reached its finish line. Wholesalers, retailers and consumers alike will be forced to adjust to this changing landscape.
Perhaps a silver lining in all of this will be a renaissance of domestic vape manufacturing. Companies like RIOT or Vampire Vape will no longer have to compete so heavily with foreign interests, potentially outpricing Chinese liquids.
Regardless of how this all plays out. UK Vape Scene will continue to offer the best prices we can while keeping our service to a high standard. You can support UK vape businesses right now by using our Ultimate Nerd Salts or Ultimate V2 ranges which are made locally in Manchester.
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