South Korea Advances Bill to Tax Synthetic Nicotine as Tobacco

South Korea’s National Assembly has taken a major step towards regulating synthetic nicotine by advancing a bill to classify it as “tobacco” under the Tobacco Business Act. The amendment, approved by the subcommittee on economic and fiscal policy, seeks to broaden the legal definition of tobacco from just “tobacco leaf” to “tobacco or nicotine.” This change would subject liquid e-cigarettes containing synthetic nicotine to the same taxes and regulations as traditional tobacco products for the first time in 37 years.

Currently, synthetic nicotine is classified as an industrial product, exempting it from tobacco consumption taxes and health levies, making these vape products cheaper and more accessible. Lawmakers estimate that closing this loophole could generate approximately 930 billion won ($646 million) in new annual tax revenue. Rep. Song Eon-seog noted that tax losses from synthetic nicotine over the past four years amounted to roughly 3.39 trillion won.

The push for regulation gained momentum following a November 2024 government study indicating synthetic nicotine contained harmful substances, and aligns South Korea with 35 other OECD nations that already regulate it as tobacco. The bill includes a two-year grace period for retailer distance requirements to ease the impact on small businesses. If fully enacted, synthetic nicotine e-liquids are expected to face significant price increases, reshaping the local e-cigarette market.

• News source: E-cigarettes may face new taxation soon

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Matthew Ma

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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.

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