April 25, 2024

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South Korea is considering extending a temporary tax cut on purchases of passenger cars, a finance ministry official said on May 27, in the latest move to boost domestic consumption.

The government slashed a special excise tax on purchases of passenger cars to 3.5 percent, from the previous 5 percent, between July and December. In January, the government extended the scheme until the end of June.

It is now considering extending the tax cut, with the final decision to be announced next month, Yoon Tae-sik, a spokesman of the Ministry of Economy and Finance, told reporters.

The comments came as Asia’s fourth-largest economy is struggling to stimulate sluggish private consumption and corporate investment.

The country’s five carmakers, including Hyundai Motor and Kia Motors, sold a combined 8.23 million vehicles in 2018, compared with 8.2 million a year earlier, according to their sales data.

By Ram Garikipati and newswires (ram@heraldcorp.com)