Allegations of 16 Trillion Won Tax Evasion from Synthetic Nicotine Imports
By Yujin KimPosted : June 24, 2026, 14:52Updated : June 24, 2026, 14:52
Electronic cigarettes displayed at a store in Seoul. [Photo=Yonhap News]
The South Korean government has refuted allegations that 300 million bottles of synthetic nicotine were imported from China, leading to an estimated tax evasion of 10 trillion won.
On June 24, the Ministry of Economy and Finance held a briefing to address claims made by Democratic Party lawmaker Jeong Jin-wook the previous day in the National Assembly.
Jeong alleged that natural nicotine from China was misclassified as synthetic nicotine to evade taxes, resulting in tax evasion estimated between 16 trillion and 20 trillion won. He stated that since 2016, approximately 300 million bottles of electronic cigarettes have been imported under the guise of synthetic nicotine, and applying an average tax of 54,000 won would indicate tax evasion exceeding 16 trillion won.
In response, the Ministry stated that the figures presented could not be verified. They explained that until the revised Tobacco Business Act took effect in April, synthetic nicotine was not classified as tobacco and thus fell into a regulatory gap. Consequently, there are no official statistics on previous sales volumes.
A ministry official added, "Since 2019, we have required six types of documents for synthetic nicotine imports, including specifications on whether the nicotine is natural or synthetic and its nicotine content."
The Korea Customs Service developed its own analysis method for distinguishing between natural and synthetic nicotine in November 2022, leading to a decrease in false reporting. Cases of false declarations dropped from 10 incidents (290 liters) in 2022 to 2 incidents (0.02 liters) last year.
The ministry noted that while the production of synthetic nicotine solutions in China is strictly regulated, exports are not prohibited, and there are no specific regulations concerning exports to South Korea.
Additionally, the ministry announced that no retroactive tobacco taxes would be applied to synthetic nicotine electronic cigarettes imported before the revised Tobacco Business Act took effect. They clarified that due to concerns over retroactive legislation during parliamentary discussions, the law would only apply to products manufactured or imported after the law's implementation date.
To prevent long-term distribution of products manufactured or imported before the law took effect, the government has established safety management standards for liquid electronic cigarette stock based on the Consumer Protection Act, effective since April 28.
Finally, the Ministry of Food and Drug Safety plans to assess the harmfulness of similar nicotine products intended for inhalation and will seek government-level responses based on the findings.
The ministry emphasized, "We will take strict measures against attempts to circumvent regulations, such as the sale of nicotine concentrate or products claiming to be nicotine-free but containing nicotine."