By Yoon Ja-young
Staff Reporter
Those who buy new cars to replace old ones purchased before 2000 will get up to a 2.5 million won tax cut. The new car should be registered within two months after selling the old one, the Ministry of Strategy and Finance said Thursday in giving advance notice of legislation of the tax revisions.
The announcement follows passage of the tax revision at the National Assembly last month.
The ministry gave details of the tax revision, which will be implemented after a Cabinet meeting June 2. The revisions came as part of government measures to help boost the economy.
The most notable is the details of the car tax benefit, which will be temporary until the end of the year.
The ministry said that those who have an old car registered before Jan. 1, 2000 would get the tax cut if they buy and register a new car within two months from deregistering or transferring the old car.
The government will cut consumption, acquisition and registration taxes by 70 percent or up to 2.5 million won.
The auto dealer will immediately give the tax cut after checking whether the buyer had an old car. If those who got the tax cut fail to register the new car within two months, they will have to return the tax benefit and pay an additional 10 percent penalty tax. Those who get tax cuts for two or more new cars while selling off only one old car will also be charged additional tax as penalty.
However, some analysts doubt whether the tax cut will help boost demand for cars. ``Those driving cars registered before 2000 will likely be the poorest among car owners. Hence, it won't be easy for them to buy a new car, which is the second most expensive purchase after a house, despite the tax cut,'' said Yong Dae-in, an analyst at Hanwha Securities.
The government also announced that businesses that invest more than their average annual investment during the past three years will also get tax breaks.
chizpizza@koreatimes.co.kr
1 | Teens feel peer pressure to buy luxury goods endorsed by K-pop stars |
