From Tomorrow, 'Synthetic Nicotine' Also Regarded as Legal Tobacco... Taxed, Warning Images Mandatory, Banned in No-Smoking Areas

Mandatory Taxation, Harmful Substance Testing, and Warning Labels on Packaging

Inventory Products Remain in Regulatory Blind Spot... Confusion Inevitable

Starting April 24, liquid-type electronic cigarettes containing "synthetic nicotine," which have thus far existed in a regulatory blind spot, will be managed as "legal tobacco." As a result, the same regulations as conventional tobacco will apply, including taxation, mandatory warning images, and a ban on online sales. However, existing inventory will be excluded from the new legal definition, making initial confusion in the market—such as the formation of "dual pricing"—inevitable.

Definition of Tobacco Expanded to 'All Nicotine'... 50% Tax Relief for Two Years

On the morning of the 23rd, employees from Buk-gu Public Health Center are posting a notice prohibiting indoor electronic cigarette smoking at a PC room in Buk-gu, Gwangju. Photo by Yonhap News.

On April 23, the government—jointly with the Ministry of Economy and Finance, the Ministry of Health and Welfare, and other relevant ministries—announced the "Enforcement and Management Plan for the Revised Tobacco Business Act." Under the revised law, effective from April 24, the definition of tobacco will be significantly expanded from just the "leaf" of raw tobacco to also include the "stem," "root," and both "natural and synthetic nicotine." Manufacturers and importers of synthetic nicotine products will now need to obtain government authorization and registration, and will be required to pay various excise and tobacco consumption taxes upon distribution.

To support small businesses and help the market adjust, the government will provide a temporary 50% reduction in these taxes for the next two years. The total tax on liquid-type electronic cigarettes is currently 1,823 won per milliliter (including local taxes, national taxes, and surcharges), but with the tax cut, about 911 won per milliliter will be applied. For the most commonly distributed 30ml product, approximately 27,000 won will be levied. Since the current market price for a 30ml bottle is between 10,000 and 30,000 won, the post-tax price is expected to approach around 50,000 won per bottle.

In addition, product packaging must include mandatory warning text and images, and a harmful substance inspection must be commissioned every two years. Online sales, sales to minors, and promotional activities such as offering prizes are strictly prohibited. Since these products are now legally considered tobacco, their use is naturally banned in no-smoking areas. Violations will result in fines of up to 100,000 won.

Initial Confusion Due to 'Dual Pricing'... Inventory Products Exempt from Tax, Causing Up to Double Price Difference

While newly manufactured or imported products after April 24 will be subject to taxation, causing unavoidable price increases, "inventory products" brought in before the law takes effect are not legally considered tobacco and therefore will not be taxed. This is expected to cause confusion in the market due to "dual pricing." To help consumers distinguish between pre- and post-revision products, the government will require that packaging of new products manufactured after April 24 include a special identification phrase printed directly on the label.

Heo Seung-chul, Director of Treasury Policy at the Ministry of Economy and Finance, stated, "The price difference between inventory products and new products is inevitable. However, we will establish minimum safety management standards for inventory products and issue public notices to limit long-term distribution, in order to restore order to the market."

There are also concerns that products using chemicals with molecular structures similar to nicotine (so-called "nicotine analogues") could enter the market to circumvent regulation. Since these analogues are not included in the definition of tobacco, they remain unregulated under the revised law and are not subject to taxation or harmful substance inspections. The government plans to promptly conduct a risk assessment of nicotine analogue products, led by the Ministry of Food and Drug Safety, and to prepare additional safety measures and institutional responses based on the results.

Meanwhile, the "distance restriction (50 meters)" regulation for existing synthetic nicotine retailers will be suspended for two years to protect small business owners. After the grace period ends, retailers wishing to continue sales must comply with the distance restriction and reapply for designation as official tobacco retailers.

This content was produced with the assistance of AI translation services.