Fuel tax cut extended as uncertainties in Middle East continue

Finance

Published: 12 Dec. 2023, 18:05

Fuel tax cut extended as uncertainties in Middle East continue

A driver refuels his car at a gas station in Seoul on Sunday. Finance Minister Choo Kyung-ho said on Tuesday that the tax cut on fuel consumption, which expires this month, will be extended for another two months. [YONHAP]

The government will extend the tax cut on fuel consumption for another two months amid uncertainties surrounding the war in the Middle East, according to the Finance Ministry on Tuesday.

“The tax cut on fuel consumption will be extended for another two months, like last time, because the movement of oil prices needs to be observed for a little longer,” said Finance Minister Choo Kyung-ho during a press conference at the government complex in Sejong.

“Oil prices are showing a downward trend, but uncertainties remain in regards to the situation in the Middle East and the [balance] of supply and demand for oil,” said Choo.

In October, the tax cut on fuel consumption was extended until the end of the year amid concerns about inflationary pressure caused by the outbreak of the Israel-Hamas conflict at the start of that month.

Finance Minister Choo Kyung-ho speaks during a press conference held at the government complex in Sejong on Tuesday. [YONHAP]

Choo said that the government will also implement measures to ensure that manufacturers and retailers provide accurate information to consumers about the amount and content of a product.

“The act of selling while being misleading about the amount is being deceptive to a consumer. Selling and distributing products in such a way that cause distrust should be eradicated.” However, he said that corporations have the freedom to decide the amount of content and the price for the product as long as it does not create health concerns.

He made the remarks amid controversy over “shrinkflation,” where companies reduce the size of a product while maintaining its sticker price.

Choo said he is not specifically reviewing an easing of the capital gains tax for major shareholders.

The government has attempted to ease regulations on the capital gains tax for large shareholders, which has been a major driver behind the annual year-end selling spree that usually takes place on Korea’s stock market.

Shareholders holding a stock worth more than one billion won ($763,000) in a single company are subject to capital gains tax. The government is considering revising the definition of a major shareholder to include those holding stocks valued at more than three billion won, according to recent media reports.

Earlier this month, Choi Sang-mok, a former senior presidential secretary for economic affairs, was nominated to be the next finance minister, who will also serve as deputy prime minister.

The outgoing Choo is expected to run for elections next year in the Daegu district, a conservative stronghold in the southeast of Korea, where he was born.

BY JIN MIN-JI [jin.minji@joongang.co.kr]