South Korea’s synthetic nicotine oil imports reached 91 tons in the first half of 2023 and are expected to reach 200 tons throughout the year

South Korea’s synthetic nicotine oil imports reached 91 tons in the first half of 2023 and are expected to reach 200 tons throughout the year

According to news from the South Korean National Assembly on the 22nd, due to the opposition of South Korea’s Ministry of Planning and Finance, the proposal to regulate e-cigarettes with synthetic nicotine as raw material to be regulated by the Tobacco Industry Act like ordinary tobacco may be aborted. The National Assembly’s Planning and Finance Committee held an economic and fiscal group meeting on the 21st and expanded the raw materials of tobacco from the previous tobacco leaves to natural nicotine including stems, roots, etc., while excluding synthetic nicotine made from chemical substances. They plan to meet again on the 23rd to confirm this content.

The Ministry of Finance of South Korea stated that although it agreed to address the blank areas of tobacco regulation, it was unable to agree to the bill to recognize synthetic nicotine as tobacco due to its unproven toxicity and safety.

Most of the raw materials for e-cigarettes sold on the market are synthetic nicotine. According to the results of monitoring of e-cigarettes sold online by the Korea Institute of Health Promotion and Development, 92.2% use synthetic nicotine. Imports of synthetic nicotine oil are increasing every year. According to data from South Korea Customs, this increased from 56 tons in 2020 to 119 tons last year. In the first half of this year alone, 91 tons were imported, and it is expected to be close to 200 tons by the end of the year.

However, unlike natural nicotine, synthetic nicotine is not subject to the tax. This is because current tobacco industry laws define tobacco as being made from tobacco leaves. The total import of synthetic nicotine oil last year was US$7.299 million, but the domestic tax revenue was zero. According to information submitted to Congress by the E-cigarette Association, as of 2019, more than 4,300 e-cigarette stores across the country achieved sales of 1.4746 trillion won (approximately US$1.13 billion), but unlike traditional cigarettes, it is not taxed.

In the past, the government has taxed products based on tobacco leaves, but starting in 2021, natural nicotine extracted from stems and roots will also be taxed through changes to the personal consumption tax law and local tax laws. The taxes collected include tobacco consumption tax, local education tax, personal consumption tax, national health promotion burden, etc., which is 1,799 won (approximately US$1.4) per liter. Synthetic nicotine is used as the raw material behind the rapid growth of the e-cigarette market.

Since e-cigarettes are not regulated by law, they can be purchased online with simple adult authentication. Unlike online sales of cigarettes or alcohol, which restrict youth access, e-cigarettes currently fall into a legal void.

Because of this situation, it has been suggested that e-cigarettes are increasing smoking rates among teenagers. In fact, the adult smoking rate fell from 66.3% in 1998 to 34.0% in 2020, but e-cigarettes increased from 1.1% in 2013 to 2.3% last year. In particular, the use rate of e-cigarettes among teenagers has increased from 3.7% for boys and 1.9% for girls in 2021 to 4.5% and 2.2% respectively last year, leading the growth trend.

The reasons why teenagers choose to buy include lighter smell, convenience of purchase and variety of designs. Because it has a variety of different fragrances, it can be inhaled at any time even indoors, and the smoke smell is light and can avoid the eyes of adults.

However, as Treasury notes, the controversy over the harmful effects of synthetic nicotine has not yet been resolved. Last month, as the Tobacco Harm Control Act passed Congress, tobacco companies will have to disclose ingredients every two years starting in November 2025, but even synthetic nicotine was excluded. Therefore, opinions have been raised about the need to disclose the ingredients of synthetic nicotine and establish a taxation system based on nicotine content.

Tobacco industry insiders said: “While traditional tobacco operators are considering launching or reviewing liquid e-cigarettes that utilize natural nicotine while bearing taxes, small-scale synthetic nicotine importers are falling into legal loopholes.” He also said that “synthesis needs to be disclosed. content of nicotine and overhauling the taxation system.”
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