South Korean Customs Cracks Down on Tax-Evading E-Cigarette Sellers

Nov.16.2022
South Korean Customs Cracks Down on Tax-Evading E-Cigarette Sellers
South Korean customs cracks down on illegal e-cigarette sellers trying to avoid import taxes by falsely labeling natural nicotine as synthetic.

A photo of an electronic cigarette store in Seoul sourced from Korea Bizwire.


A report in the Korean Business News has revealed that sellers attempting to evade taxes by passing off naturally extracted nicotine from tobacco as synthetic nicotine have been targeted by officials from the South Korean Customs Department.


The South Korean customs agency has announced a plan to increase its crackdown on sellers who falsely report natural nicotine as synthetic nicotine in e-cigarette liquids in order to avoid paying import taxes on such products.


The General Administration of Customs announced on Thursday that they have developed a high-precision analytical method to determine whether the nicotine in e-cigarette oils is extracted from tobacco leaves or synthetic.


This technique utilizes a sample preparation method called "derivation" to increase the detection sensitivity of specific components in tobacco by 30 times.


According to tax laws, electronic cigarette liquid made from natural nicotine is classified as cigarettes and is subject to an inland tariff of 1,799 Korean won (approximately $1.32 USD) per 1 milliliter.


In contrast, electronic cigarettes made from chemical materials synthetically produced nicotine are not classified as cigarettes but as manufactured products, and therefore exempt from cigarette consumption tax.


In certain instances, to avoid taxes, importers falsely declare natural nicotine in e-cigarette fluid as synthetic nicotine.


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