Key Points
- Fiscal Impact: Projected increase of $37M–$340M in local tax revenue.
- Reason for Range: Differences in estimating diluted vs. concentrated nicotine distribution volumes.
- Regulatory Fix: Closes loopholes where synthetic nicotine escaped taxation and tobacco regulation.
- Public Benefit: Aims to eliminate cheap unregulated e-cigarettes and enhance youth protection.
- Expert View: Reform targets tax fairness and oversight, not merely higher rates.
2Firsts — November 19, 2025 — According to South Korean media outlet Joseplus, The Korea Institute of Local Finance (KILF) has projected that amendments to the Tobacco Business Act, passed by the National Assembly in September, will increase local tax revenue by between $37 million and $340 million in 2025.
The wide range reflects differences in how synthetic nicotine circulates—either as 1% diluted solutions or concentrated raw liquid. Based on customs data for diluted products, the projected increase is about $37 million; however, industry estimates for raw liquid suggest a potential gain of $340 million, and the total fiscal effect could reach $680 million once full taxation is implemented.
Currently, the law defines tobacco as “the leaf of the tobacco plant,” excluding synthetic nicotine. As a result, e-cigarette liquids containing synthetic nicotine have evaded taxes and tobacco-related controls such as vending restrictions and price regulation, allowing easy access for minors.
Dr. Kim Hong-hwan, a senior researcher at KILF who has pushed for this amendment since 2020, stressed that “this is not a tax hike but a move toward equity and proper oversight.”
“Synthetic nicotine is clearly used as an ingredient in e-cigarettes, yet legally it isn’t considered tobacco — that’s a legislative flaw,” Kim said. “We hope the bill passes the plenary session soon so the government can manage this sector systematically.”
Image source: Joseplus
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
