South Korea plans to cut consumption taxes on cars and large electronics goods temporarily as part of efforts to stimulate anemic consumer spending that is weighing down economic growth, the government said Wednesday.

Private consumption has remained in the doldrums since the Middle East Respiratory Syndrome outbreak in late May. In June, retails sales and the service sector contracted at the sharpest pace since February 2011, with consumption backtracking 0.3 percent from three months earlier.

"Private spending showed signs of improving in July, but the momentum remains weak," said Deputy Finance Minister Jeong Run-bo.

"Unless things turn around quickly, weak consumption could become a trend."

"The goal of the latest plan is to stimulate pent-up demand in consumers who have benefited from a steady rise in gross domestic income that rose 6.7 percent on-year in the April-June period."

Under the plan, excise taxes levied on cars, large household appliances and certain health food supplements like royal jelly can be slashed by 30 percent till Dec. 31.

Excise tax rates on all cars and large air conditioners, TVs, washing machines and refrigerators will be lowered to 3.5 percent from 5 percent.

Such a move can cause less taxes to be collected, but the finance ministry said the drop will be offset to some extent by more sales that can allow other dues to be collected.

The finance ministry also said the taxable price for furniture, cameras, watches, bags, fur, carpets and jewelry will be adjusted to a base of 5 million won from the current 2 million won, which can make these products cheaper.

In addition, the government said it will encourage large retailers, online shopping malls and supermarkets to launch large-scale discount sales in October. This move will be timed to take place with discount promotions offered by the country's tourism sector.

The public sector will take the lead in encouraging its employees to take leave so they can spend more money, and spur the retail and tourism sectors.

To encourage senior citizens to spend more, the government will lift all restrictions on the so-called housing pension program, the ministry said.

This will allow senior citizens to receive monthly pension payments from banks by using their homes as collateral. In the past, only homes valued at under 900 million won were eligible.

The ministry predicted that the consumption-boosting measures will raise the country's economic growth rate by 0.025 percentage point.

South Korea is trying to achieve at least 3 percent growth, although many independent think tanks said mid-to-high 2 percent growth is more realistic for 2015. (Yonhap)