Chinese manufacturers of synthetic nicotine have significant cost advantages
China’s new regulations limit nicotine sales, and Synthetic Nicotine is more conducive to supervision. The decision on Amending the regulations for the implementation of the tobacco monopoly law of the people’s Republic of China (Draft for comments) puts forward the regulatory idea of “electronic cigarettes and other new tobacco products shall be implemented with reference to the relevant provisions on cigarettes in these Regulations”.
Strict supervision of e-cigarettes will lead to the production side paying more attention to product quality and supervising e-cigarette manufacturers to use nicotine from formal and legal sources. At present, natural nicotine is limited by the mixed supply sources of China tobacco system, and the compliance risk is high. The raw materials of synthetic nicotine can be traced to the source, so that the whole process of electronic cigarette products can be monitored from the source. The new deal will help to improve the permeability of Synthetic Nicotine. It is predicted that the national policy will continue to benefit the Synthetic Nicotine enterprises in the future.
In our country, the approximate tax rate, ad valorem and ad valorem are parallel, and the tax focus tends to ad valorem tax. The state has certain control over nicotine. The tax policy is likely to tax smoke bombs. Since the focus of taxation is on production, the key is the specific tax rate in the production link. Nicotine is the core link of e-cigarette supervision. If the ad valorem tax is focused, the manufacturer will mediate the nicotine content of a single shot. Therefore, the tax focus tends to be specific tax.
Domestic synthetic nicotine manufacturers have significant cost advantages and are expected to quickly seize the global Synthetic Nicotine market. On September 24, 2021, the nicotine project of Shandong Jincheng Pharmaceutical Chemical Co., Ltd., a subsidiary of Jincheng Pharmaceutical Group, began to be put into trial production. The selling price of Synthetic Nicotine of Jincheng pharmaceutical is lower than that of next generation labs, a foreign leader, and has deeply cooperated with Hangsen technology, the largest tobacco oil export enterprise in China, and has opened the export channel, It is expected that the selling price of exported tobacco oil products is lower than that of foreign competitors, which is expected to quickly seize the U.S. market.
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