[THE INVESTOR] The National Assembly’s finance committee is expected to decide on Oct. 20 about hiking consumption taxes on heat-not-burn tobacco products, also known as e-cigarettes, to 90 percent on par with regular cigarettes.
If taxes are raised, prices of e-cigarettes, such as Philip Morris; HEETS and BAT’s Neostiks, are expected to shoot up, possibly costing up to 5,000 won(US$4,415) a pack from the current 4,300 won range.
The proposed higher taxes will be applied by the third week of December after passing a related bill, according to assembly sources.
However, uncertainty remains as related discussions have been inconclusive since August.
“We may have to consider raising the price per pack to over 5,000 won, if the government increases consumption taxes,” a Philip Morris spokesperson told The Investor.
The firm also regretted the taxation plans, saying that the industry and government should be encouraging smokers to move on to alternative products that are less harmful for health. “Raising prices sends a contrary message,” the company spokesperson added.
The damage e-cigarettes have on health is still being debated, but manufacturers claim they emit much safer fumes and are ultimately less harmful.
Meanwhile, the Japanese government is also mulling raising taxes on e-cigarettes due to growing sales. In 2016, HNB sales amounted to 221.9 billion yen (US$2 billion). Currently in Japan, taxes on a single pack of e-cigarettes ranges from just 34 yen to 192 yen, based on the weight of tobacco sticks, while regular cigarettes are taxed around 240 yen per pack.
By Song Seung-hyun (email@example.com)