South Korea Vape Tax: Solid vs Liquid Debate

Concerns raised in South Korea over lower taxes on solid-form e-cigarettes compared to liquid types, prompting calls for tax system reform for fairness.

A significant difference in taxation standards based on product structure persists in South Korea’s e-cigarette market, leading to debates over fairness and calls for regulatory reform. Specifically, products using nicotine in solid form are subject to much lower tax rates compared to their liquid-based counterparts.

Tobacco Control Center Calls for Tax System Revision

The Tobacco Regulation Research and Education Center highlighted this issue on the 13th, stating that solid-form e-cigarettes are in a tax blind spot and urging an overhaul of the current taxation method. Currently, liquid-type e-cigarettes, where nicotine-infused liquid is absorbed by cotton, are taxed based on the total volume of the nicotine-containing liquid (approx. 628 KRW per 1ml). In contrast, solid-type products, which use solid nicotine with a non-nicotine liquid, are taxed based only on the weight of the solid nicotine, regardless of the liquid volume. This results in a significantly lower tax (e.g., approx. 70 KRW for a 2ml liquid/0.8g solid product).

Experts point out that this discrepancy means consumers pay vastly different taxes for similar nicotine consumption, creating an unfair advantage for certain products and potentially serving as a tax avoidance method. While the government is discussing overhauling the tax system for new tobacco products, including synthetic nicotine, critics argue that detailed measures for solid-type e-cigarettes are lacking. Lee Sung-kyu, head of the Center, emphasized that tobacco taxation is directly linked to health policy and the current system could undermine fairness and policy trust.

News source: 액상형은 과세, 고체형은 면세 수준…담배규제연구교육센터 “고체형 전자담배 편법 과세 개선 필요”

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Matthew Ma

Marketing at Ecigator

With over a decade of experience in the e-cigarette industry, Matthew Ma is a seasoned expert in both the manufacturing and usage aspects of vaping products. His extensive background has provided him with a deep understanding of the intricacies and evolving dynamics of e-cigarettes.