Exports plunge

| April 16, 2018

Exports of cigarettes from South Korea plunged during the first quarter of this year, according to a story in The Korea Herald citing figures published yesterday by the Ministry of Agriculture, Food and Rural Affairs.

The value of the country’s cigarette exports from January to March, at $210.6 million, was said to have been down by 28.3 percent on that of the same period of last year.

The exports were hit hard by the imposition of a 100 percent special consumption tax on cigarettes in the United Arab Emirates, which is Korea’s largest overseas customer for cigarettes.

In October, the UAE imposed sin taxes on tobacco, soda and energy drinks, partly as a way of lowering its rates of obesity and diabetes, and to limit the consumption of addictive substances.

The UAE additionally imposed a five percent value-added tax on cigarettes in January.

Taken together, the new taxes caused the retail prices of Korean cigarettes to double.

With Saudi Arabia having imposed a ‘sin’ tax on cigarettes before the UAE did, and with other countries in the Gulf Co-operation Council set to follow suit this year, Korean cigarette exports are forecast to fall further.

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Category: Breaking News, Markets, Tax

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