The price of heat-not-burn (HNB) cigarettes will go up in South Korea starting next year, following a decision on Friday to raise individual consumption tax on the product that has been gaining fast grounds among Korean smokers despite questions about its health risk.

The National Assembly’s finance committee on Friday reviewed and voted for a revised bill to raise individual consumption tax on HNB cigarettes to 90 percent of that imposed on conventional cigarettes. The revised bill that has been approved by finance committee members will go into effect in January after a plenary session.

HNB cigarettes or e-cigarettes such as iQos and glo are a new type of cigarette that heats tobacco to release vapor for inhaling, which is different from conventional combustible products.

Initially, the South Korean government had planned to raise individual consumption tax on HNB cigarettes to the same level as conventional cigarettes, citing similarity between the two product types. Concerns, however, were raised that low-income people would fall victim to the tax hike as retail price would go up. A pack of Phillip Morris’ iQos is currently sold at 4,300 won ($3.8).

Amid concerns, some lawmakers during the finance committee meeting on Aug. 31 opposed to the idea of raising the individual consumption tax rate of HNB cigarettes to the same level as ordinary ones. Ruling and opposition lawmakers were divided on the issue and lawmakers including Cho Kyung-tae suggested that the bill be reconsidered. After much discussion, lawmakers representing four parties agreed to raise individual consumption tax on HNB cigarettes to 90 percent of conventional cigarettes.

Meanwhile, Phillip Morris, a dominant player in the new industry, said that it will be inevitable for the tobacco manufacturer to raise the retail price of iQos following the tax rate hike. Although the company did not mention by how much the price would be raised, industry sources note it could reach over 5,000 won per pack.

By Boo Jang-won and Lee Eun-joo

[ⓒ Pulse by Maeil Business Newspaper & mk.co.kr, All rights reserved]