The government is considering providing tax cuts on electric cars as part of its efforts to bolster eco-friendly businesses amid the global drive for green growth, government officials said Thursday.
Discussion is underway to provide electric cars with exemption from consumption, acquisition and registration taxes which are applied to other kinds of vehicles in South Korea, the officials at the Ministry of Strategy and Finance said.
"Buyers of eco-friendly hybrid cars are given reductions on special consumption tax and others. In line with it, the government is also planning to offer the same tax benefits to buyers of electric vehicles," said a high-ranking ministry official on condition of anonymity.
Under the current law here, for example, a car with a 2,000cc engine or smaller is subject to a 5 percent special consumption tax on its total purchasing cost. The tax rate for a larger one rises to 10 percent.
The envisioned tax incentives could reduce vehicle purchase costs by around 3 million won (US$ 2,620), experts say.
The move is part of the government efforts to bolster green businesses as the nation's next generation growth engine. Such tax cuts are expected to draw customer attention and boost sales of the vehicles drive by eco-friendly technologies.-PNA
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