South Korea will terminate the cut in the consumption tax on passenger cars starting next month, the finance ministry said Thursday, in an apparent move to make up for a recent decrease in tax revenue.
In July 2018, the government slashed the auto consumption tax to 3.5 percent from 5 percent and had extended the measure in an effort to boost domestic demand amid the COVID-19 pandemic.
The tax cut is supposed to expire at the end of June and the government decided not to extend it anymore "given the current brisk car industry and the improvement in consumption conditions," the ministry said in a release.
The decision came as the country has seen a decline in tax revenue in recent months amid the slump in the property market and an economic slowdown weighed down business activities.
During the first four months of this year, tax revenue amounted to 134 trillion won ($102.51 billion), down 33.9 trillion won from a year earlier, according to government data. (Yonhap)