South Korea Cracks Down on Nicotine Tax Evasion

Mar.10.2023
South Korea Cracks Down on Nicotine Tax Evasion
South Korean customs officials seize smuggled tobacco worth $2.63 million by developing new nicotine analysis technology.

On March 8th, according to reports from South Korean media outlet TBSNEWS, the Korea Customs Service has successfully caught individuals attempting to evade taxes by falsely declaring tobacco products using a newly developed nicotine analysis technology. The accused had disguised natural nicotine oil as tax-exempt synthetic nicotine oil.


According to regulations by the Korean Customs Office, naturally derived nicotine extracted from tobacco is classified as "tobacco" and taxed at a rate of 1799 Korean won (approximately 9.49 Chinese yuan) per milliliter of solution. However, synthetic nicotine produced from chemicals is classified as "manufactured goods" and is exempt from taxes.


The central laboratory of the Korea Customs Service has revealed that out of 64 boxes (approximately 303 items) of "liquid electronic cigarettes" declared as synthetic nicotine that were inspected since November last year, 11 boxes (approximately 36 items) were falsely declared as synthetic nicotine e-cigarettes despite containing natural nicotine oil.


In an effort to crack down on tax evasion, the Korean Customs Service developed a new nicotine analysis method in November of last year, as well as increasing scrutiny of e-cigarette e-liquids.


The Korean Customs Service has reportedly uncovered a total of 11 cases involving the smuggling of 280,000 litres of e-liquid, resulting in a tax evasion amounting to 500 million Korean won (approximately 2.63 million Chinese yuan). It is said that this volume of e-liquid would be sufficient for 6.5 million people to smoke simultaneously.


The South Korean Customs Service stated that they will continue to crack down on false reporting practices through precise analysis of imported goods.


Reference:


A fake declaration of synthetic nicotine as a tax portal: 6.5 million cases of e-cigarettes confiscated



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