With panic buying occurring ahead of taxation on liquid e-cigarettes, the government has effectively decided to ban sales of stockpiled quantities, according to reports on the 10th. The move is aimed at preventing tax avoidance through stockpiling. Taxation on liquid e-cigarettes will begin at the end of April.
Recently, the Ministry of Finance and Economy gave advance notice of legislation for a new notice establishing the "safety management standards for stock products of liquid e-cigarettes," centered on this approach. It includes a clause that "recommends suspending sales of products manufactured before taxation that are older than six months." Based on the tax start date (April 24), this effectively prohibits sales of liquid e-cigarettes manufactured on or before Oct. 24 last year. In this manner, by the end of May, products made on or before the end of November last year, and by the end of June, products made on or before the end of December last year, would sequentially become unsellable. As a result, by the end of October, sales of all products manufactured before taxation will be banned.
To that end, the government plans to apply Article 50 of the Framework Act on Consumers, which states that "if a product is feared to harm consumers' lives or bodies, the government may collect and destroy it." Although the notice frames it as a recommendation, it will in effect be a mandatory measure.
Liquid e-cigarettes had been excluded from taxation. Because the definition of taxable tobacco was "the leaf of tobacco," liquid e-cigarettes using synthetic nicotine were not classified as tobacco.
However, at the end of last year, the National Assembly passed an amendment to the Tobacco Business Act that broadened the definition of tobacco to "tobacco or nicotine," bringing liquid e-cigarettes into the tax net. As a result, the price of a 30 ml bottle of liquid e-cigarette solution, currently in the 10,000–20,000 won range, is expected to rise into the 40,000 won range this year and into the 70,000 won range two years later. In this situation, some companies began stockpiling to secure large inventories before taxation takes effect, and the government is said to have detected this.
A government official said, "We will launch joint crackdowns with local governments and the Ministry of Health and Welfare," adding, "If entities are caught failing to heed the recommendation, we plan to collect and destroy products under the Framework Act on Consumers."