SEOUL, Sept. 24 (Korea Bizwire) — The government plans to readjust a variety of taxes attached to electronic cigarettes, such as the cigarette consumption tax and special consumption tax, to even out the balance between taxes imposed on e-cigarettes and non-electronic cigarettes.
The Ministry of Economy and Finance announced the plans on Monday, following complaints that taxes imposed on e-cigarettes, including IQOS and lil, are lower than those imposed on non-electronic cigarettes.
Taxes imposed on heat-not-burn cigarettes and liquid e-cigarettes are lower than those imposed on non-electronic cigarettes by 90 percent and 43.2 percent, respectively.
The government will also look into foreign cases to decide if JUUL and other newer e-cigarettes should be seen as new kinds of e-cigarettes, and consider the possibility of readjusting tax rates for heat-not-burn cigarettes.
“One thing we have to consider, however, is that rules on imposing tax on electronic and non-electronic cigarettes are different, “said Yang Soon-pil, a departmental head at the Ministry of Economy and Finance.
“While we impose tax on non-electronic cigarettes by piece, tax on e-cigarettes is imposed by milliliter, so it is difficult to admit for now that the tax rate for e-cigarettes is indeed lower than non-electronic cigarettes.”
As for non-electronic cigarettes, ministry officials emphasized that there will be no changes in tax rates.
As of the second quarter this year, 88 percent of all cigarette sales in South Korea came from non-electronic cigarettes, 11.5 percent from heat-not-burn e-cigarettes, and 0.7 percent from liquid e-cigarettes.
A tax of 2,595.4 won (US$2.17) is imposed on heat-not-burn cigarettes, compared to 1,799 won for liquid cigarettes.
As for closed system vaporizers, a single pod contains 0.7 milliliters of liquid, which is equivalent to 1,261 won in taxes.
H. M. Kang (email@example.com)