SOUTH KOREA. South Korean soldiers serving abroad will be able to buy duty free cigarettes, the Ministry of Finance and Economy said this week.
The measure, which will go into effect on 1 July 2004, lets troops assigned to overseas units pay duty free prices for the first time.
“The exact price depends on the brand, but it would be safe to say that soldiers will be able to buy cigarettes at less than half the market price here,” a government official said.
He said that the price could actually fall even further because state-owned Korea Tobacco & Ginseng Corp (now modernising under the new name KT&G) will not consider their usual business margin when selling cigarettes to soldiers heading off to dangerous areas.
At present, the average duty rate for a pack of cigarettes in South Korea is 68% of the total price and a pack of cigarettes in general costs US$0.25-0.33 to make.
The Ministry also said that cigarettes sold to tourists in North Korea – where Duty Free Korea (KNTO) is slowly building up its operation – will also receive duty free benefits. This week an agreement between the two Koreas, after four-days of economic talks, finalised plans to develop North Korea’s Mt Kumgang as a special tourism zone at the earliest possible date.
The government has not levied taxes on tobacco products sold north of the border since October 2003, but the latest revisions are expected to give this more of a legal base. Cigarettes to be sold by KNTO in the north are expected to be comparable to international airport duty free prices.
