After cigarette prices were raised in 2015, consumers are now purchasing tobacco products directly from foreign countries. (Image : Yonhap)
SEOUL, March 23 (Korea Bizwire) – After cigarette prices were raised in 2015, consumers are now purchasing tobacco products directly from foreign countries.
According to data from the Ministry of Government Administration and Home Affairs, 21,869 parcels containing cigarettes were imposed duties from January to July 2015, which translates to approximately 3,124 parcels per month.
The numbers are nearly 10 times higher than the 333 cases tallied in 2013, when discussions about cigarette price hikes were still underway, and four times higher than the 822 cases in 2014, when cigarette price increases were officially announced.
Industry watchers explain that higher cigarette prices pushed consumers to purchase tobacco products when traveling abroad, or to make direct online purchases from overseas vendors.
However, ministry officials commented that the number of customs declarations is still insignificant compared to the total consumption of cigarettes. The current rate is five to six cases on a normal day and nine to ten cases during vacation season.
In the meantime, the ministry and customs officials are planning to revamp the system through which taxes are imposed on cigarettes purchased overseas. The current system requires consumers to obtain local tax bills and pay them before going through customs, and then pay the national tax once again. However, a new rule which will enter into effect on June 30 allows purchasers to receive both tax bills at once, and make payments within 15 days.
By Lina Jang (linajang@koreabizwire.com)
