April 20, 2024
Economy
Consumption tax on passenger car purchases to be cut to 3.5%
[THE INVESTOR] The government on July 31 approved a tax cut on purchases of passenger cars, in a bid to stimulate sluggish private consumption and business investment.
Under the latest stimulus measure, endorsed by Cabinet at a meeting earlier in the day, individual consumption tax on purchases of passenger cars will be reduced to 3.5 percent from 5 percent until the end of this year.
The tax cut applies to passenger cars that were produced from July 19, Finance Ministry officials said.
The ministry said the tax cut would lift economic growth by 0.1 percentage point on a quarterly basis.
The tax cut came as Korea’s economic growth appears to be under pressure.
The Bank of Korea said last week that the economy slowed slightly in the second quarter from three months earlier due mainly to sluggish facility and construction investment.
By Song Seung-hyun and newswires (ssh@heraldcorp.com)
