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

From Border-Logistics Insiders to Retail Service Stations, Australia Mounts a Sweeping Crackdown on the Illicit Nicotine Trade as iGET Vapes Surface in A$80 Million Crime Networks
From Border-Logistics Insiders to Retail Service Stations, Australia Mounts a Sweeping Crackdown on the Illicit Nicotine Trade as iGET Vapes Surface in A$80 Million Crime Networks
Australian authorities have disclosed two major enforcement actions that go beyond product seizures and retail closures to examine how illicit tobacco and vape networks operate. On Aug. 14, the Multi Agency Strike Team said seven people had been charged and two criminal networks were valued by authorities at a combined A$80 million, or about US$56.8 million. Investigators allege the groups used bonded warehouses, freight businesses and “trusted insiders” in legitimate industries to circumvent border controls. In a separate operation on Aug. 11, more than 100 service stations were targeted as authorities sought information on illicit tobacco importation, distribution networks and the movement of sales proceeds.
Aug.17
Smoore Wins Three Heated Device Supply Lots in China Tobacco Jiangsu’s Overseas Market Project Covering Japan, South Korea and Southeast Asia
Smoore Wins Three Heated Device Supply Lots in China Tobacco Jiangsu’s Overseas Market Project Covering Japan, South Korea and Southeast Asia
China Tobacco Jiangsu Industrial Co., Ltd. (JSIC) has completed its 2026-2028 heated device procurement project, with Shenzhen Smoore Technology Limited securing final supply contracts for three lots: U1, C1 and C2. The project was launched through a public tender in June 2026 to support overseas markets and involved heated tobacco devices carrying JSIC’s “iRod” trademark. Candidate supplier results published on July 13 showed Smoore ranked first for the three awarded lots, while Shenzhen Yunxi Intelligent Technology Co., Ltd. and Shenzhen Bodi Technology Development Co., Ltd. participated in the bidding process.
Aug.03
IQOS Global Flagship Space to Open in Tokyo Ginza as PMI Expands Consumer Experience Strategy
IQOS Global Flagship Space to Open in Tokyo Ginza as PMI Expands Consumer Experience Strategy
Philip Morris Japan (PMJ) announced that it will open “IQOS Flagship Ginza” in Tokyo on September 4, 2026. The location will become the first global flagship space for PMI’s IQOS brand. PMJ said the venue will target adult smokers aged 20 and above and combine product experiences, community engagement and local cultural elements. The design will incorporate Japanese natural aesthetics and traditional craftsmanship. The launch reflects PMI’s broader strategy of strengthening consumer engagement through experiential retail and brand spaces. The existing IQOS Store Ginza is scheduled to close on August 30, 2026.
Jul.21
Vape Industry Group Loses Alabama Court Fight as State Tightens Rules on Imported Products
Vape Industry Group Loses Alabama Court Fight as State Tightens Rules on Imported Products
The Alabama Supreme Court affirmed a lower court’s refusal to issue a preliminary injunction blocking the state’s 2025 electronic nicotine delivery systems law, allowing rules requiring covered products to be U.S.-made or FDA-authorized to remain in effect.
Jul.10
Product | PMI Introduces VEEV inPrime, Bringing an Induction Vaporization Platform to the Next Generation of the VEEV Portfolio
Product | PMI Introduces VEEV inPrime, Bringing an Induction Vaporization Platform to the Next Generation of the VEEV Portfolio
Philip Morris International (PMI) has introduced VEEV inPrime, the next-generation closed-system vape platform featuring the new AdvanceVape Induction System™. Alongside the new induction platform, PMI has redesigned the pods, e-liquid formulations and user interaction experience. According to PMI and official IQOS websites, VEEV inPrime began a phased European rollout between May and June 2026, with products now available in Greece, Estonia, the United Kingdom and Italy.
Jul.14
French Anti-Tobacco Group Questions PMI’s IQOS “Curiosity” Campaign Over Potential Youth Appeal
French Anti-Tobacco Group Questions PMI’s IQOS “Curiosity” Campaign Over Potential Youth Appeal
According to French anti-tobacco group Générations Sans Tabac, Philip Morris International’s (PMI) IQOS “Curiosity” campaign has drawn attention from public health advocates. The group argues that the campaign uses themes including curiosity, exploration and lifestyle branding that could increase interest among younger audiences. PMI has positioned IQOS as a key part of its smoke-free product strategy, while France maintains strict restrictions on tobacco and nicotine product marketing. The debate highlights ongoing tensions between heated tobacco branding strategies and public health concerns in Europe.
Jul.24