| - The Korea Herald
- Dec. 29, 2004
- By Kim Ji-hyun
Korea will extend tax cuts already in place on automobiles for six months to fuel demand and help revive the economy amid weak domestic consumption, the Ministry of Finance and Economy said yesterday.
The 20 percent tax cut, which was slated to end this year, will be extended to June 30 next year.
This means the luxury tax on cars with an engine capacity of at least 2,000cc will remain at 8 percent, while taxes on cars with smaller engines will stay at 4 percent.
"This extension comes as a preemptive move to prevent consumer confidence from weakening further," said the Finance Ministry in a statement.
The ministry said sales tax cuts on 12 other items, including jewelry, furs and carpets, will remain in place until the end of June 2005.
In November this year, consumer confidence fell to its lowest point in four years. A robust export volume of more than $200 billion helped prop up the sagging economy. Citing the anemic consumption, Finance Minister Lee Hun-jai announced last month that the country may be unable to achieve 5 percent economic growth this year.
LG Economic Research Institute most recently projected 4.7 percent growth, a figure that compares to the 7.7 percent average expected for Asian economies.
For next year, the Bank of Korea expects 4 percent growth based on calcuations that the weak U.S. dollar, coupled with strong crude oil prices and a slowdown in exports gains could weigh on the economy.
(jemmie@heraldm.com)
|
Blank
