S. Korea provides tax reduction on vehicles to stimulate consumption

SEOUL, Dec. 19 (Yonhap) -- The government said Friday that it started to provide temporary tax reductions on the purchase of cars as part of efforts to stimulate fast-slumping consumption and shore up the overall economy.
Special consumption taxes on passenger vehicles with engine displacements of
2,000 cc or lower have been cut to 3.5 percent from the previous 5 percent, the
Ministry of Strategy and Finance said in a statement. The tax rate on passenger
cars with engine displacements exceeding 2,000 cc has also been trimmed to 7
percent from 10 percent.
The lowered tax rates will be effective on cars to be sold starting Friday until
the end of June next year, the ministry said.
The move is intended to stimulate slumping private spending at a time when
exports growth, the nation's key growth engine, is slowing at a
faster-than-expected pace.
It is also in line with the ministry's policy priority for next year which
focuses on tax reduction and eased administrative red tape to fuel consumption
and business activities in the face of growing concerns over a worldwide economic
slump.
kokobj@yna.co.kr
(END)