Drivers Are Largest Holiday Taxpayers
By Lee Hyo-sik
Staff Reporter
Traffic congestion is at the top of the list of concerns facing holiday drivers who plan to visit their parents and relatives in provincial areas and head back to Seoul during the upcoming Lunar New Year holidays Jan. 24-27.
However, they might not realize how much they are paying in tax by driving cars on crowded highways. Holiday travelers who do not take a bus or other means of public transportation are good taxpayers in the eye of the government, because traveling by private vehicle fattens the state coffers.
According to the refinery industry Thursday, various local and national taxes account for about 64.3 percent of retail gasoline prices here, substantially higher than 19 percent in the United States and 30 percent in Japan.
First, transportation and a number of special excise taxes amounting to 745 won are levied per liter of gasoline. With retail gasoline prices averaging 1,350 won per liter nationwide early this week, and an additional 10 percent value-added tax, or 135 won, levied, the entire fuel tax is increased to 868 won, according to Korea National Oil Corp.
For instance, if someone drives a sedan with a gasoline-powered engine of 2,000cc from Seoul to the southeastern port city of Busan. Assuming one liter of gasoline costs 1,350 won and the vehicle consumes one liter per 10 kilometers, it costs 58,000 won to travel between the two cities, as the distance between them is 430 kilometers.
Of the 58,000 won, about 37,000 won goes to the state coffers as fuel tax. But travel time normally at least doubles during the holiday season because of traffic congestion, pushing up the gasoline tax to a minimum of 74,000 won.
They pay the same amount in taxes when they head back to Seoul, making drivers pay a total of 148,000 won in gasoline taxes for the round trip.
The Ministry of Strategy and Finance slashed taxes on gasoline and other oil products by 10 percent last March to lower auto fuel costs for drivers in the wake of surging international crude oil prices. But with rapidly falling oil prices since last summer as a result of the global economic slowdown, the government ended the temporary tax cut at the end of last year.