On November 11th, the National Association of Electronic Cigarette Associations, comprised of small business owners and users who operate e-cigarette shops, gathered in front of the National Assembly to demand their right to survive. The association called for a fair and reasonable taxation plan for e-cigarette liquids, citing government regulations and tax decisions that have caused the market to decline and the government's failure to ensure revenue.
During a visit to the site by Representative Choi Chung-zai, Chairman of the Democratic Power Small Business Committee, small business owners pointed out that South Korea has the highest tax rate on liquid electronic cigarettes in the world. Compared to the second-ranked state in the United States, Connecticut, the tax collected by Korea is more than triple that amount.
The tax on e-cigarette liquid has increased by 1274 Korean won, with 628 Korean won as tobacco consumption tax, 276 Korean won allocated to local education tax, and 370 Korean won as personal consumption tax. Additionally, since August of last year, a national health promotion fee of 525 Korean won has also been imposed, bringing the total tax on e-cigarette liquid to 1799 Korean won. As a result of this tax increase, a 30ml bottle of e-cigarette liquid now costs 53,970 Korean won, significantly higher than a pack of 20 traditional cigarettes priced at 3323 Korean won.
Mr. Huang, who operates a 50 square meter (15pyeong) electronic cigarette shop in Yijung, Gyeonggi Province, said, "This store was damaged by a heavy rainstorm and needs urgent repairs, but I think the tax issue in the liquid electronic cigarette market is even more important." "Due to unfounded regulations by the government, I live in fear of failure every day," he said. Taxes have increased significantly, but there is no guarantee of tax revenue from liquid electronic cigarettes. In fact, according to the Ministry of Strategy and Finance's "2021 Tobacco Market Trends" released in January, the tax security for liquid electronic cigarettes is 0 Korean won. The association argues, "The tax levied on liquid electronic cigarettes is at an intolerable level for the industry.
On the afternoon of the 11th, Representative Cui Shengzai spoke at a press conference outside of the National Assembly for small business owners in the electronic cigarette industry. The Federation also expressed dissatifaction with the Ministry of Health, Labor and Welfare's strong recommendation to suspend the use of liquid electronic cigarettes in 2019, which has not been withdrawn and still remains in effect.
This is because the company is suffering from business losses due to its failure to heed strong recommendations to stop using tetrahydrocannabinol (THC) and vitamin E acetate, which are the main causes of severe lung disease in the United States, even though only minimal amounts have been found in Korea.
Mr. Huang said, "I earnestly request that through communication with the market, we can formulate a normal policy, a law that is understandable and practical, so that we can do business and live a good life." In response to their appeal, Congressman Cui said, "It is the responsibility of the country to safeguard the survival right of small business owners and create a comfortable way of doing business." He promised. Cui's speech was welcomed by the association, and he added, "The current tax rate on liquid electronic beds is indeed in a legal gray area, which is unfair compared to cigarettes and overseas cases.
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