KT&G may postpone release of LIL ‘heat-not-burn’ cigarettes

By Jhoo Dong-chan

KT&G may put off the release of the company’s first ‘heat-not-burn’ (HNB) e-cigarettes amid an ongoing debate over a possible tax hike on e-cigarettes such as Phillip Morris’ iQOS and British American Tobacco’s (BAT) Glo.

The nation’s leading tobacco company had planned to introduce its first HNB e-cigarette LIL next month, but is now likely to release the product after the tax hike bill is passed in the National Assembly.

According to the National Assembly, Friday, its strategy and finance committee members will discuss the possible tax hike on HNB e-cigarettes on Aug. 28. The committee members, who reportedly reached an agreement on the matter, were expected to announce the revised bill on Aug. 23, but have decided to re-negotiate the issue.

Industry observers and National Assembly officials say, therefore, the revision won’t be able to pass during the upcoming National Assembly plenary session on Aug. 30. The bill is then expected to be processed during the next plenary session next month.

Earlier this year, Three lawmakers _ Rep. Park Nam-chun of the ruling Minjoo Party of Korea, Rep. Kim Gwang-lim of the main opposition Liberty Korea Party and Rep. Park In-sook of the minor opposition Bareun Party _ proposed the revision.

Strategy and finance committee members reportedly agreed that the tax on iQOS and Glo was too small because of the absence of a related tax code for HNB e-cigarettes.

Rep. Kim and Rep. Park In-sook said the tax on e-cigarettes should be as much as that on conventional cigarettes. But Rep. Park Nam-chun claims that the former should be less than the latter.

Phillip Morris International and BAT Korea said, however, that tax rates and other regulatory standards should remain unchanged for a considerable period of time, blaming Korea’s policy inconsistency.

Currently, Phillip Morris’ iQOS Heets e-cigarettes sell for 4,300 won ($3.78) per package including a 1,739.6 won tax. A general package of cigarettes sells for 4,500 won in Korea of which 3,323.4 won is tax.

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