Korea to extend tax cut on fuel for 4 months

Korea plans to extend the consumption tax cut scheme on fuel set to expire this month, through April 2023.

A signboard at a gas station shows gasoline prices at 1,440 won ($1.10) per liter and diesel prices at 1,685 won a liter on Dec. 18, 2022. [YONHAP]

Korea plans to extend the consumption tax cut on fuel, through April 2023, the finance ministry said Monday, although the discount for gasoline will be adjusted in sync with stabilizing market prices.

Korea has been offering a 37-percent discount for consumption of fuel since July to cope with the hike in global energy prices.

Under the latest plan, the government plans to offer a tax cut of 25 percent for gasoline consumption from January to April, according to the Ministry of Economy and Finance.

The ministry plans to maintain the 37-percent discount for consumption of diesel and liquefied petroleum gas (LPG) butane through April.

As for automobiles, the ministry plans to extend the current discount of 30 percent on individual consumption tax, also set to expire this month, through June 2023.

The government also plans to maintain the current 15-percent tax cut for resources used in power generation for six months, citing rising prices.

The plan needs to be approved at a Cabinet meeting scheduled on Dec. 27.

The country's consumer prices, a key gauge of inflation, rose 5 percent on-year in November, compared with a 5.7 percent growth tallied in October, data from Statistics Korea showed.

The price of utility services gained 23.1 percent on-year in November amid the soaring energy prices sparked by the prolonged war between Russia and Ukraine. South Korea relies heavily on imports for its energy needs.

BY PARK EUN-JEE, YONHAP