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

Australia Tobacco Tax Debate Spreads Within Labor as NSW Premier Minns Reaffirms Support for a Cut
Australia Tobacco Tax Debate Spreads Within Labor as NSW Premier Minns Reaffirms Support for a Cut
Australia’s tobacco excise debate is increasingly exposing differences within the governing Labor Party. New South Wales Labor Premier Chris Minns reaffirmed on September 8 that he supports reducing tobacco excise, arguing that current tax settings are pushing consumers toward cheaper black-market cigarettes. Federal Health Minister Mark Butler continues to oppose an excise cut, while Treasurer Jim Chalmers and Assistant Treasurer Daniel Mulino have recently stopped short of ruling out future changes. The divergence follows the opposition Coalition’s proposal to cut tobacco excise by 80%.
Sep.08
China Tobacco Supply-Chain Leader Huabao’s Three-Way Transformation Takes Hold as Overseas Revenue Jumps 216%, Non-Flavor Businesses Reach 42.2% and the Company Expands Into Global Next-Generation Tobacco Supply Chains
China Tobacco Supply-Chain Leader Huabao’s Three-Way Transformation Takes Hold as Overseas Revenue Jumps 216%, Non-Flavor Businesses Reach 42.2% and the Company Expands Into Global Next-Generation Tobacco Supply Chains
Huabao’s H1 2026 results show the company advancing across three connected fronts: international expansion, entry into next-generation tobacco supply chains and diversification beyond its traditional tobacco-related base. Overseas revenue rose 216.08% to CNY 96.02 million, while non-flavor businesses reached 42.2% of total revenue. Huabao also said it had entered the supply chains of leading global tobacco customers, as its nutrition, food ingredient, fragrance and personal-care businesses gained ground in Europe, Southeast Asia, Australia and New Zealand. However, adjusted net profit increased only 2.78%, and next-generation tobacco revenue was not separately disclosed, showing that the transformation is reshaping revenue and customer exposure but has yet to translate fully into underlying earnings.
Aug.28
2Firsts First Look|China to End VAT Export Rebates on Vape Devices and Nicotine in April 2027, Following Earlier Removal for HTP Devices and Nicotine Vapes
2Firsts First Look|China to End VAT Export Rebates on Vape Devices and Nicotine in April 2027, Following Earlier Removal for HTP Devices and Nicotine Vapes
China's Ministry of Finance and State Taxation Administration announced on October 12, 2026, that value-added tax (VAT) export rebates for vape devices, nicotine and its salts, and certain non-combustible inhalation products will be eliminated from April 1, 2027. The measure adds four tobacco- and nicotine-related customs codes, including 8543400010, which covers vape devices and qualifying empty pods. China previously eliminated rebates for nicotine-containing vaping products and devices under code 8543400090 in April 2026. According to industry classification information held by 2Firsts, the latter currently corresponds to heated tobacco devices. Export excise tax refund and exemption arrangements will remain unchanged.
Special Report
Oct.12
HG Innovation, linked to IMiracle and ELFBAR, wins China patent for 6-methylnicotine salts covering vaping and oral products
HG Innovation, linked to IMiracle and ELFBAR, wins China patent for 6-methylnicotine salts covering vaping and oral products
HG Innovation Limited has been granted a Chinese invention patent covering 6-methylnicotine salt formulations and their use in oral and vaping products. The technology forms salts between 6-methylnicotine and alicyclic carboxylic acids, with granted claims extending to oral products, atomization substrates and electronic atomization devices. Applicant-generated tests reported differences in oxidation stability, in-vitro cytotoxicity and aerosol heavy-metal performance compared with selected benzoate or lactate controls. HG Innovation is directly linked to the broader IMiracle and ELFBAR business network.
Sep.04
Product | PMI Launches ZYN Melts in UK, Extending ZYN Beyond Nicotine Pouches Into Dissolvable Tablets
Product | PMI Launches ZYN Melts in UK, Extending ZYN Beyond Nicotine Pouches Into Dissolvable Tablets
Philip Morris International (PMI) has launched ZYN Melts in the UK, introducing a fully dissolvable oral nicotine tablet format alongside the brand's existing nicotine pouches. The range includes Cool Mint and Peppermint, each offered at 1mg and 2mg of nicotine per tablet, creating four SKUs. Each can contains 20 tablets and is priced at £6.50 in the UK. Unlike ZYN nicotine pouches, Melts are placed between the upper lip and gum and dissolve completely during use.
News
Sep.29 by 2Firsts Perspectives
As Regulators Focus on Nicotine Pouch Child Safety, Safeguard Pursues an External Packaging Route
As Regulators Focus on Nicotine Pouch Child Safety, Safeguard Pursues an External Packaging Route
As regulators pay closer attention to child safety in nicotine pouches, manufacturers face a practical challenge: how to strengthen child-resistant packaging without unnecessarily reworking products, production lines and regulatory submissions already in place. In a written interview with 2Firsts, Chemular detailed Safeguard’s external packaging approach, its customer-specific testing requirements and possible PMTA pathways. The model remains early-stage, but it offers a new way to think about an increasingly important regulatory and manufacturing issue.
Industry Insight
Sep.19