The discussion on the amendment to the Tobacco Business Act, which aims to define liquid electronic cigarettes made from synthetic nicotine as 'tobacco' and regulate them, ended without a conclusion once again.
The Economic Finance Subcommittee of the National Assembly Planning and Finance Committee held a one-point meeting on the 18th to process the Tobacco Business Act, but it adjourned after about 20 minutes without reaching a conclusion.
The argument that rights to sell regular tobacco should be granted to stores selling synthetic nicotine, which are proliferating in bustling areas and are not subject to tobacco regulation, hindered the progress of the discussion.
The government interpreted that current small businesses with existing tobacco sales rights could sell both regular tobacco and synthetic nicotine tobacco, while those selling synthetic nicotine tobacco without tobacco sales rights would not be allowed to sell regular tobacco during the regulatory grace period.
In response, opposition party lawmakers argued that rights to sell regular tobacco should also be granted to synthetic nicotine sales businesses, and the Chairperson of the subcommittee, Jung Tae-ho, a member of the Democratic Party, noted that the government continues to raise new issues, declaring, 'No one should be unfairly treated,' as the meeting was adjourned.
◇ Government presents 'inclusive plan' to postpone tobacco regulation by 2 years
The government reported a phased regulatory introduction plan to help small businesses selling synthetic nicotine electronic cigarettes restructure by postponing the sales distance regulations for two years and reducing the tobacco tax on synthetic nicotine electronic cigarettes by 50% for two years.
The Ministry of Strategy and Finance, the governing body of the Tobacco Business Act, stated in a report that 'it is necessary to implement taxation simultaneously with business regulations' regarding taxation on synthetic nicotine electronic cigarettes, adding that 'principally, the same tax rate as that applied to liquid natural nicotine electronic cigarettes is needed in consideration of tax equity.'
However, it proposed a supplemental opinion that 'if necessary to alleviate the burden on small businesses due to taxation, it is possible to consider a partial reduction (50% for two years) during the initial taxation period.'
Currently, a pack of regular cigarettes (20 cigarettes) comes with a total excise tax burden of 3,323 won. The Ministry of Strategy and Finance plans to impose an excise tax on synthetic nicotine electronic cigarettes at a similar level of 3,275 won (corresponding to 20 regular cigarettes at 1.6 mL). However, during the initial two years of taxation, it intends to charge only 1,800 won to reduce the industry's burden.
Regarding the overlapping issue of tobacco sales rights (distance restrictions), it stated that a grace period of two years would be given until the law comes into effect to encourage voluntary restructuring of synthetic nicotine electronic cigarette retailers, with the intention to guide them to voluntarily wind up their business.
◇ 'Let's allow synthetic nicotine businesses without tobacco sales rights to sell regular tobacco'
However, a question arose during the subcommittee meeting about whether synthetic nicotine sales businesses would be able to sell regular tobacco during the two-year grace period. The Ministry of Strategy and Finance responded that stores with existing tobacco sales rights could sell synthetic nicotine tobacco, but those without tobacco sales rights could not sell regular tobacco.
In response, Democratic Party lawmaker Yoon Ho-jung asked, 'If someone who previously sold regular cigarettes can now sell synthetic nicotine, shouldn't those who sold synthetic nicotine also be allowed to sell regular tobacco?'
Chairperson Jung Tae-ho then stated, 'The government continues to raise new issues,' and declared, 'Let's discuss this again. No one should be unfairly treated,' as the meeting was reported to have been adjourned.
With the discussion in the subcommittee falling through, the amendment to the law aimed at preventing youth from purchasing synthetic nicotine cigarettes through vending machines near schools and online has fallen into obscurity.
A member of the National Assembly's Planning and Finance Committee said, 'It is uncertain whether it can be processed within the 22nd National Assembly.' Another official questioned, 'Is the 'amendment that no one should be unfairly treated,' mentioned by the Chairperson, realistically possible?' and expressed doubts about whether there is a willingness to proceed with the law.
A Ministry of Strategy and Finance official stated, 'The government's consistent position is that it is appropriate to regulate synthetic nicotine electronic cigarettes just like regular tobacco to enhance public health rights' and added, 'We will continue to persuade for the amendment of the law.'