Lawmakers agree on pursuing tax hike for HNB tobacco

Lawmakers agreed Tuesday to pursue changes to current tax legislation that would raise individual consumption taxes on heat-not-burn tobacco products to the same level as combustible cigarettes.

The taxation committee discussed three different proposals regarding the consumption tax on the new types of e-cigarettes that heat, rather than burn, tobacco to create vapor. It decided to impose a tax of 594 won (52 cents) per pack of 20 tobacco sticks -- raising it to the same level as combustible cigarettes.

This year, international tobacco companies Philip Morris International and British American Tobacco released heat-not-burn products priced at 4,300 won per pack, based on taxes that were lower than those for combustible cigarettes.

“It has not even been a year since these taxes were set,” said a spokesman for Philip Morris International. “To change them now will not only hurt our business but also affect consumers.”

Once passed, the changes in tax law will likely lead to an increase in the consumer price of tobacco sticks for the two companies’ IQOS and Glo systems.

Meanwhile, domestic cigarette maker KT&G is rumored to be gearing up for the launch of its own heat-not-burn system. The company confirmed Tuesday that it had registered a patent for the brand name Lil, but declined to confirm any plans for a release date.

By Won Ho-jung (hjwon@heraldcorp.com)