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

Ohio Supreme Court Weighs Whether State Consumer Law Can Restrict Flavored Vape Sales
Ohio Supreme Court Weighs Whether State Consumer Law Can Restrict Flavored Vape Sales
The Ohio Supreme Court is hearing a case involving flavored vape sales and whether state authorities can use consumer protection laws to take action against retailers selling unauthorized vape products. Ohio officials argue that selling unauthorized flavored vapes may constitute consumer deception, while retailers argue that tobacco product regulation falls under federal Food and Drug Administration (FDA) authority and that states cannot impose additional restrictions through consumer laws. The case could affect the scope of state-level vape regulation across the United States.
Aug.06
Philip Morris Italia Invests €1 Million to Upgrade Retail Network, Supporting 45,000 Tobacco Shops in Smoke-Free Shift
Philip Morris Italia Invests €1 Million to Upgrade Retail Network, Supporting 45,000 Tobacco Shops in Smoke-Free Shift
Philip Morris Italia has launched the Trade Academy program, investing €1 million to provide training and development support for approximately 45,000 tobacco retailers in Italy. The initiative aims to strengthen retailers’ capabilities in heated tobacco products, digital tools and consumer services. The move reflects how nicotine companies are increasingly investing in retail networks and frontline capabilities as new nicotine products become more important in the market.
Jul.28
Australia’s One Nation Proposes 75% Tobacco Tax Cut, Says Lower Prices Could Hit Illicit Market
Australia’s One Nation Proposes 75% Tobacco Tax Cut, Says Lower Prices Could Hit Illicit Market
Australia’s One Nation party has proposed cutting tobacco excise by 75%, arguing that lower legal cigarette prices could narrow the gap with illicit tobacco and reduce demand for black-market products. The proposal comes as Australia continues expanding enforcement against illicit tobacco supply chains through border controls, retail inspections and organised-crime investigations. Supporters argue high taxes have contributed to illicit-market growth, while opponents warn that lower tobacco prices could undermine public-health goals. The proposal is a party policy position and has not been adopted by the Australian government.
Aug.18
Product | JT Launches Ploom AURA Glacier White in Japan, Expanding the Device Ecosystem Through Color and Accessories
Product | JT Launches Ploom AURA Glacier White in Japan, Expanding the Device Ecosystem Through Color and Accessories
Japan Tobacco Inc. (JT) has introduced the Ploom AURA Glacier White heated tobacco device in Japan, adding a new color option to the existing Ploom AURA lineup. The device maintains the existing SMART HEATFLOW technology and HEAT SELECT SYSTEM with four heating modes, while expanding the ecosystem through new accessories including front panels, back covers, a car holder and wireless charging covers. The product entered pre-sale in Japan on June 30, 2026, followed by broader retail availability from July 7.
Aug.03
Product | JT Expands Vote-Winning EVO Cacao Mint Crystal to Nationwide Retail in Japan, Adds 22-Stick Limited Pack at Same Price
Product | JT Expands Vote-Winning EVO Cacao Mint Crystal to Nationwide Retail in Japan, Adds 22-Stick Limited Pack at Same Price
Japan Tobacco (JT) will expand EVO Cacao Mint Crystal from limited channels to nationwide retail in Japan from October 6, 2026. The Ploom tobacco stick ranked first in the brand's first consumer voting campaign for new tobacco-stick SKUs held earlier this year. JT will also introduce a limited 22-stick pack at the same JPY 620 price as the standard 20-stick pack. The capsule-format product combines menthol with sweet, bittersweet cacao notes and adds a berry nuance when the capsule is crushed.
Sep.09
2Firsts Compliance Solutions Hosts PMTA Briefing on FDA Review Signals After JUUL2 Authorization
2Firsts Compliance Solutions Hosts PMTA Briefing on FDA Review Signals After JUUL2 Authorization
Following recent FDA authorizations for JUUL2 and ZYN ULTRA, 2Firsts Compliance Solutions held an online PMTA briefing on Sept. 4 to examine what the decisions may signal about review efficiency, scientific evidence and U.S. market access. Nearly 30 participants from brands, manufacturers, compliance service providers and investment firms joined the discussion.
2Firsts Events
Sep.06