Seoul, December 24 (QNA) - South Korea extended its consumption tax cut on passenger cars on Wednesday for an additional six months until the end of June next year.
The South Korean Ministry of Finance announced that under this extension, the individual consumption tax on passenger cars will be reduced to 3.5 percent instead of 5 percent.
Korean news agency (Yonhap) quoted the Ministry of Finance as saying that this measure will end on June 30, 2026, given recent indicators of a recovery in domestic demand.
The government began applying this tax reduction in July 2018, and has extended it several times since then to support domestic consumption, especially during the COVID-19 pandemic.
In a separate context, the government will also extend the fuel tax cut for an additional two months until the end of February to ease the burden on consumers amid continued fluctuations in global oil prices.
Under the latest extension, the current tax reduction rates, 7 percent on gasoline and 10 percent on diesel and liquefied petroleum gas, will remain in effect until Feb. 28.
South Korea first applied the fuel tax cut in November 2021 in response to rising energy prices, and since then the government has extended the measure, adjusting the rates in accordance with changes in the global energy market. This latest extension marks the 19th of its kind.
South Korea, which depends heavily on energy imports, is particularly vulnerable to external price shocks that often lead to domestic inflation. (QNA)