Heated-tobacco tax threat

| June 28, 2017

A new bill seeking to impose on heated-tobacco products the same level of taxes as are already imposed on combustible cigarettes has been introduced to Korea’s National Assembly, according to a story in The Korea Herald.

The Herald indicated that the bill had been introduced because ‘all harmful tobacco products must be regulated the same way’.

According to the National Assembly’s Bill Information System, Rep. Kim Kwang-lim of the Liberty Korea Party has prepared bills to amend three laws that govern taxation on tobacco products so as to allow equal taxation to be imposed on combustible cigarettes and heat-not-burn tobacco products, such as the IQOS system launched in Korea this month by Philip Morris International.

Heat-not-burn products are made with processed tobacco leaves, but are promoted as producing far fewer toxins than are produced by cigarettes because there is no combustion process in the case of the former.

Under current legislation, each pack of cigarettes is subject to 3,323 won ($2.92) in taxes, while each pack of heated tobacco sticks is liable to 1,588 won in taxes. These sums are made up of a number of taxes, such as excise tax, a health promotion fund tax and consumption tax.

If the three amendments are passed by the National Assembly, consumers of heated-tobacco sticks for the IQOS system will pay an additional 1,350 won in taxes per pack.

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Category: Breaking News, Tax

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