South Korea Considers Taxation on Synthetic Nicotine Products

Regulations by 2FIRSTS.ai
May.13.2024
South Korea Considers Taxation on Synthetic Nicotine Products
South Korea debates taxing synthetic nicotine e-cigarettes, sparking concern about potential price hikes in the market.

According to the South Korean news media "NEWS 1" reported on May 13, as the South Korean government actively promotes harmful research on whether synthetic nicotine should be regulated, there is growing concern about the potential rise in prices of liquid e-cigarettes.

 

If synthetic nicotine is included in the regulation of tobacco activities, previously untaxed "synthetic nicotine" liquid e-cigarettes will be subject to tobacco tax and additional tax. According to relevant departments, health authorities will commission a study this month to evaluate the harmfulness of synthetic nicotine. Congress is currently discussing whether to include the regulation of synthetic nicotine in their agenda for review and research.

 

Currently, there is controversy in Congress over the regulation of synthetic nicotine. Some argue that it should not be classified as "tobacco" before its harmful effects are proven, while others believe it should be regulated as "tobacco" and are calling for government research. It is understood that currently, synthetic nicotine cigarettes made from chemical substances are not subject to legal restrictions as "tobacco.

 

In the liquid smoke on the market, although there are natural nicotine products, according to the government, the majority use synthetic nicotine. Because these products are not considered tobacco under tobacco business laws, they can be sold and promoted online, which regular tobacco cannot do. The products also do not need warning texts and images that can harm health, and they do not need to collect legal tobacco-related taxes and fees. Compared to regular tobacco, consumers can purchase synthetic nicotine tobacco at a lower price, while sellers can make more profit.

 

Global tobacco company British American Tobacco (BAT) recently announced plans to launch a synthetic nicotine e-cigarette exclusively in South Korea, sparking further controversy. The controversy intensified as BAT stated that they would pass the savings from tax and excise duties on to consumers, along with criticism of their strategy of exploiting regulatory loopholes in South Korea.

 

Taking advantage of these regulatory loopholes, the synthetic nicotine e-cigarette market is rapidly expanding. According to data submitted to Democratic Representative Kim Young-soo's office by the Korea Customs Service, imports of e-cigarettes containing synthetic nicotine solution have more than doubled in two years, growing from 56 tons in 2020 to 119 tons in 2022. The import volume in the first half of last year alone reached 91 tons, showing a very strong growth momentum.

 

If synthetic nicotine is included in the definition of "tobacco" under the Tobacco Products Act, e-cigarettes that use synthetic nicotine liquid will automatically be subject to tobacco tax and additional fees. This is because under the Tobacco Products Act, all tobacco products are subject to individual consumption taxes and tobacco consumption taxes, as well as additional fees for public health promotion.

 

Recently, there has been a growing discussion surrounding the regulation of synthetic nicotine, with analysts predicting that this will ultimately lead to a broader taxation on liquid e-cigarettes. When designing research tasks, the government seems to have already taken into consideration the possibility of taxing synthetic nicotine, as they have included a comparison of the harmfulness of synthetic nicotine and natural nicotine in their considerations.

 

In tobacco control laws, the taxation of various forms of tobacco, such as cigarettes and e-cigarettes, is typically determined based on their level of harm. Therefore, a credible assessment is needed to determine the tax rate and tax unit for synthetic nicotine. There are voices in the industry that believe that even if synthetic nicotine is taxed, it should be taxed at a lower rate than traditional tobacco, so preparations should be made for this.

 

If taxes are implemented, it is inevitable that the price of liquid e-cigarettes will rise. In the high-cost, high-interest rate environment, the expansion of discussions on consumption taxes such as tobacco taxes may lead to debates about increasing consumer burden of taxes. For the government, which is focusing on restoring livelihoods, this is a heavy burden.

 

Despite the controversy surrounding regulatory gaps, the Ministry of Finance has not clearly expressed its stance on whether to recognize synthetic nicotine as a legal "tobacco" issue, analysts believe this is due to the current situation. The Ministry of Finance is cautious about whether synthetic nicotine needs to be regulated, in contrast to health authorities who emphasize the need for regulation of synthetic nicotine. Health authorities unanimously emphasize the need to regulate synthetic nicotine as part of the legal "tobacco." In reality, an immediate ban on sales is quite difficult, so it is necessary to include synthetic nicotine in the definition of "tobacco" under tobacco control laws and actively regulate it.

 

A South Korean Ministry of Economy and Finance official stated, "The decision on whether to include synthetic nicotine in the tobacco business law involves tax issues, so we cannot provide an immediate answer." He also said, "We will coordinate with relevant departments based on research results.

 

We welcome news tips, article submissions, interview requests, or comments on this piece.

Please contact us at info@2firsts.com, or reach out to Alan Zhao, CEO of 2Firsts, on LinkedIn


Notice

1.  This article is intended solely for professional research purposes related to industry, technology, and policy. Any references to brands or products are made purely for objective description and do not constitute any form of endorsement, recommendation, or promotion by 2Firsts.

2.  The use of nicotine-containing products — including, but not limited to, cigarettes, e-cigarettes, nicotine pouchand heated tobacco products — carries significant health risks. Users are responsible for complying with all applicable laws and regulations in their respective jurisdictions.

3.  This article is not intended to serve as the basis for any investment decisions or financial advice. 2Firsts assumes no direct or indirect liability for any inaccuracies or errors in the content.

4.  Access to this article is strictly prohibited for individuals below the legal age in their jurisdiction.

 

Copyright

 

This article is either an original work created by 2Firsts or a reproduction from third-party sources with proper attribution. All copyrights and usage rights belong to 2Firsts or the original content provider. Unauthorized reproduction, distribution, or any other form of unauthorized use by any individual or organization is strictly prohibited. Violators will be held legally accountable.

For copyright-related inquiries, please contact: info@2firsts.com

 

AI Assistance Disclaimer

 

This article may have been enhanced using AI tools to improve translation and editorial efficiency. However, due to technical limitations, inaccuracies may occur. Readers are encouraged to refer to the cited sources for the most accurate information.

We welcome any corrections or feedback. Please contact us at: info@2firsts.com

Special Report|CrossBar's High-Puff Vapes Draw Attention on Pennsylvania's 163-Product Directory as Link Between Earlier 1.3mL PMTA Filings and New 13mL Products Remains Unclear
Special Report|CrossBar's High-Puff Vapes Draw Attention on Pennsylvania's 163-Product Directory as Link Between Earlier 1.3mL PMTA Filings and New 13mL Products Remains Unclear
Pennsylvania began enforcing its electronic nicotine delivery system directory restrictions on October 19, 2026. Among 163 product listings recorded before enforcement, four CrossBar 20K disposables stood out with 13mL capacity, advertised puff counts of up to 20,000 and a flattened design distinct from conventional pod systems and compact disposables. Historical records identify earlier 1.3mL CrossBar products associated with Romo LLC, while newer 13mL products appeared in several state directories beginning in 2025 under entities including Blue Nine LLC. PMTA compliance expert Mr. K identified amendments and application ownership transfers as possible regulatory mechanisms, although neither has been confirmed in this case. Separately, Reynolds' $7.5 million acquisition of 16 PACHA products and related assets illustrates the commercial value of products linked to historic PMTA submissions.
Special Report
Oct.22
RLX Technology Dropped From FTSE All-World as International Business Reaches 68.5% of Q2 Revenue
RLX Technology Dropped From FTSE All-World as International Business Reaches 68.5% of Q2 Revenue
RLX Technology (NYSE: RLX) has been removed from the FTSE All-World Index, effective September 21. FTSE Russell records show RLX was already part of its global equity index universe by 2022, when its American depositary receipts were classified as China Large Cap securities. Trading volume rose to about 44.77 million shares on September 18, roughly 23 times the previous session's volume. RLX reported RMB1.0105 billion in second-quarter revenue, up 14.8% year over year, with international operations contributing 68.5%. The company also acquired a 51% stake in one of Western Europe's largest distributors of next-generation smoke-free and FMCG products in July.
Sep.22
PMI's IQOS Extends ZAMNA Electronic-Music Partnership to Spain as Vogue España Publishes Branded Content
PMI's IQOS Extends ZAMNA Electronic-Music Partnership to Spain as Vogue España Publishes Branded Content
Philip Morris International's IQOS has extended its partnership with electronic-music event brand ZAMNA to Spain, setting up a House of IQOS at ZAMNA Madrid. Vogue España and Time Out Madrid subsequently published branded content clearly labeled as collaborations with IQOS. PMI has also expanded its company-owned IQOS boutique network in Spain to seven cities this year. The company says IQOS's adjusted heated-tobacco market share in Europe reached 12.6% in the first quarter of 2026, with Spain among its stronger-performing European markets.
Sep.20
GSTHR Estimates 200 Million People Use Non-Combustible Nicotine Products as 28 Countries Show Rising Use Alongside Falling Smoking Rates
GSTHR Estimates 200 Million People Use Non-Combustible Nicotine Products as 28 Countries Show Rising Use Alongside Falling Smoking Rates
The Global State of Tobacco Harm Reduction, a project operated by Knowledge·Action·Change, estimates that about 200 million people worldwide use non-combustible nicotine products including vapes, heated tobacco, nicotine pouches and snus. Its 2026 report says use of these products rose alongside declining smoking rates in 28 countries it analyzed. The data do not establish that all 200 million users have quit smoking, nor do they prove a direct causal relationship. GSTHR also says regulatory restrictions on the products continue to expand in many markets.
Sep.10
Altria’s USSTC Starts $250 Million Kentucky Expansion, Adding More Than 200 Jobs
Altria’s USSTC Starts $250 Million Kentucky Expansion, Adding More Than 200 Jobs
U.S. Smokeless Tobacco Company, an Altria Group company, has broken ground on an approximately $250 million manufacturing expansion in Hopkinsville, Kentucky. The roughly 270,000-square-foot facility is expected to create more than 200 jobs and absorb processing, manufacturing and packaging operations currently split between Hopkinsville and Nashville, Tennessee. USSTC previously said production at its Nashville facility is expected to wind down by early 2028. The project forms part of Altria’s broader effort to modernize and consolidate its U.S. smokeless tobacco manufacturing network.
Sep.10
Reynolds Showcases Vuse Pro Flavors and VELO Nicotine Pouches at NACS Show 2026
Reynolds Showcases Vuse Pro Flavors and VELO Nicotine Pouches at NACS Show 2026
Reynolds American, a BAT subsidiary, showcased four Vuse Pro flavored e-cigarette pods and its VELO nicotine pouch portfolio at NACS Show 2026. Booth staff confirmed to 2Firsts that the Vuse Pro flavors are sold in the U.S., although they have not received FDA marketing authorization. BAT outlined plans to expand Vuse retail distribution and reported that VELO held a 30.5% year-to-date volume share of the U.S. modern oral nicotine category through August 2026. The booth also featured the newly launched VELO MAX range and merchandising displays combining cigarettes, vaping products and oral nicotine brands.
EXPO
Oct.09