• May 21, 2024

E-cig tax hike coming

 E-cig tax hike coming

Tobacco sticks for heat-not-burn devices are due to become more expensive in South Korea after lawmakers there passed a bill yesterday to increase taxes on them, according to a story in The Korea JoongAng Daily.

Currently, the tax on a pack of 20 tobacco sticks is 126 won ($0.11), while the tax on combustible cigarettes is 594 won.

But under the revised law, the consumption tax for sticks will rise to 529 won.

When combined with other taxes, such as the regional education tax and value-added tax, the total tax on sticks currently add up to 1,739 won, but that is set to rise to 2,990 won.

By comparison, the total tax on combustible cigarettes is 3,323 won.

The effect on the retail price is expected to be a 700 won increase on a 20-stick pack, taking it from 4,300 won to 5,000 won.

The bill passed with overwhelming support. Of the 239 lawmakers who voted, 230 were in favor, one was opposed and eight abstained.

Having unleashed a monster when it hiked taxes on combustible cigarettes at the beginning of 2015, the government is taking steps to curb bulk buying and hoarding ahead of the imposition of the latest tax increase.

The Ministry of Strategy and Finance is restricting the amount of tobacco sticks that manufacturers can supply to the market to 110 percent of the average supply during the past three months.

Any retailers who commit profiteering could face up to two years in prison or a 50 million won fine, the ministry said.