Heavy Green Taxes Burden Koreans
By Kim Tae-gyu
Staff Reporter
A sole bread winner of a four-member family pays more than $2,000 per year in green taxes, or duties levied in relation to the use of energy.
The Hyundai Research Institute (HRI), a private think-tank, said Wednesday that Koreans pay an average of $508 every year in green taxes, which accounts for 10.3 percent of the country's overall tax revenues.
It is the highest among 30 member countries of the Organization for Economic Cooperation and Development (OECD).
Included in the green taxes category are those on auto acquisition, registration and ownership as well as the ultra-high indirect taxes paid by purchasers of kerosene or gasoline.
``Only Korea maintains a double-digit figure in proportion of green taxes among national tax yields. Even Scandinavian states fail to reach double digits,'' HRI researcher Lee Won-hyung said.
``We have the abnormally high ratio because the government resorts to the easy-to-raise indirect gasoline taxes. This should change for many good reasons over the long haul,'' Lee said.
The Netherlands came in second in the green tax ratio at 9.9 percent followed by Denmark with 9.7 percent, Finland with 6.9 percent, Germany with 6.7 percent and Norway with 6.2 percent.
The comparable ratios were a mere 3.1 percent for the United States and the United Kingdom each and those for Belgium and France were less than half of Korea at 4.6 percent, respectively.
The average for OCED countries is 5.38 percent.
``Most OECD countries adopt green taxes not only on energy consumption but also on greenhouse gases and wastes. Still, they do not depend on that much on green taxes,'' Lee said.
``Accordingly, Korea should be cautious in introducing tax schemes on wastes and green house gases because they are feared to force citizens to shoulder too much of a tax burden,'' he said.
Lee added that heavy green taxes also aggravate the income disparity because people are not price sensitive in energy consumption.
In other words, even poor people cannot reduce energy usage dramatically when their prices head upward dramatically due to increased indirect taxes.