So far, South Korea had categorized e-cigarettes differently than their combustible counterparts, hence iQOS is currently levied at a lower tax rate than the 75% imposed on regular cigarettes.
Then last October, Korea’s National Assembly’s finance committee discussed the possible implementation of a tax on Heat-not-Burn (HnB) products, that would match the one imposed on regular cigarettes. The bill was passed last Thursday.
Taxing safer alternatives as much as deadly cigarettes
“HNB cigarettes should be categorized as conventional cigarettes as they use the same tobacco and emit smoke, which is similar to the harmful smoke released by traditional cigarettes,” said a mistaken Rep. Kim Gwang-lim of the major opposition Liberty Korea Party a few months back.
During the plenary session, 230 out of 239 present lawmakers voted in favour of the bill, with one disapproval and eight abstentions. The tax raise which is expected to go into effect next month, will increase the prices of PMI’s ‘Heets’ and BAT’s ‘Neostiks’, from the current 4,300 range to about 5,000 won (US$4,415) a pack. “We may have to consider raising the price per pack to over 5,000 won, if the government increases consumption taxes,” said a Philip Morris spokesperson last month.
Tax revenue vs public health
South Korea has been actively fighting smoking, infact earlier this year the Ministry of Health and Welfare of South Korea, had successfully implemented a regulation that forces cigarette manufacturers to put graphic images of the harmful effects of smoking on cigarette packets. Research keeps indicating that HnB products are safer than their combustible counterparts, hence Public Health experts will agree that taxing them in the same way as their deadly counterparts will prove counterproductive to this movement.