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

Changing Assumptions in U.S. Cigar Consumption: 2Firsts Interviews Cigar Educator Mechelle Merkerson
Changing Assumptions in U.S. Cigar Consumption: 2Firsts Interviews Cigar Educator Mechelle Merkerson
U.S. premium cigar culture is shifting toward education, broader choice and deeper links to craftsmanship and origin, cigar educator Mechelle Merkerson told 2Firsts. She sees boutique brands, women consumers and production-region experiences making knowledge central to cigar participation. For global brands, retailers and emerging markets such as China, education may help turn curiosity into sustained engagement.
Special Report
Jul.06
Malaysia Police Plan Saliva Tests at Roadblocks to Detect Synthetic Drugs Mixed Into Vape Liquids
Malaysia Police Plan Saliva Tests at Roadblocks to Detect Synthetic Drugs Mixed Into Vape Liquids
Malaysian police plan to use saliva test kits at roadblocks to detect drivers using synthetic liquid drugs marketed as “Piu Piu” and “Magic Mushroom,” substances that authorities say are mixed into vape liquids and inhaled through e-cigarette devices, raising road-safety concerns and adding pressure on vape regulation.
Jun.29
Product | JT Upgrades with2 Infused Tobacco Capsules With Double-Size BIG PACK
Product | JT Upgrades with2 Infused Tobacco Capsules With Double-Size BIG PACK
Japan Tobacco Inc. (JT) announced that it will introduce a BIG PACK version of all five tobacco capsule variants designed for its with2 infused tobacco system. Scheduled for release in Japan on August 4, 2026, the refreshed packaging doubles the contents from five capsules and one cartridge to ten capsules and two cartridges while maintaining the same flavors and formulations
News
Jun.26 by 2Firsts Perspectives
PMI Expands IQOS and VEEV Presence at Frankfurt Airport Through Travel Retail Pop-Ups
PMI Expands IQOS and VEEV Presence at Frankfurt Airport Through Travel Retail Pop-Ups
According to The Moodie Davitt Report, PMI Global Travel Retail and Frankfurt Airport Retail have launched new IQOS and VEEV retail spaces at Frankfurt Airport. The installations, located inside and outside duty-free areas, showcase IQOS heated tobacco products and VEEV e-vapor products through product education, consumer interaction and brand experiences. Frankfurt Airport Retail, operated by Fraport Group and Gebr. Heinemann, manages key retail activities at Frankfurt Airport. The initiative follows PMI’s broader strategy of expanding smoke-free products through global travel retail channels. PMI has previously introduced VEEV products across multiple European airports while continuing to expand IQOS and VEEV availability in international markets.
Jul.17
Product | VELO Launches Tomorrowland Limited Edition 2026 as Festival IP Enters Nicotine Pouch Packaging
Product | VELO Launches Tomorrowland Limited Edition 2026 as Festival IP Enters Nicotine Pouch Packaging
BAT’s nicotine pouch brand VELO has introduced the Tomorrowland Limited Edition 2026. Public retail-channel information shows the product has appeared across multiple European online platforms, while Haypp UK has listed related SKUs with a “Coming soon” status. The packaging carries the wording “Official Tomorrowland Partner,” indicating that the collection is part of VELO’s official collaboration with the electronic music festival brand.
Jul.02
Nicotine Pouches Lead U.S. Tobacco Growth as Vape Sales Decline
Nicotine Pouches Lead U.S. Tobacco Growth as Vape Sales Decline
New convenience store industry data show nicotine pouches have become the primary growth driver in the tobacco category, with oral nicotine sales rising nearly 30% over the past year while vape sales declined.
Business
Jun.05