Koo Yoon-cheol, Deputy Prime Minister and Minister of Finance, announced these measures on June 18 during a special task force meeting on living prices.
In the energy sector, starting this second half of the year, a zero percent allocated tariff will be fully applied to liquefied natural gas (LNG), propane, butane, and crude oil for LPG production. Furthermore, the individual consumption tax on LNG for power generation will be temporarily reduced until December, and the flexible tax rate on LPG butane will be extended for an additional month.
The Ministry of Finance plans to study whether the zero tariff on energy will exert downward pressure on consumer prices. A ministry official explained, "Allocated tariffs are not applied at the consumer level but are tax reductions given to importers at the time of purchase. We are conducting research, and it has been confirmed that there is downward pressure on prices. However, it may be difficult for consumers to feel this impact directly."
In the agricultural sector, allocated tariffs will be supported for a total of 22 items, including three types of fruits, 17 food raw materials, and two feed raw materials. The allocated tariff period for 13 items nearing expiration will be extended, and new allocated tariffs will be applied to feed raw materials until the end of the year.
Although the allocated tariff period has been extended, the quantity remains unchanged due to the existing stock not being depleted. The Ministry of Finance decided to extend the period in consultation with the Ministry of Agriculture, Food and Rural Affairs.
A ministry official stated, "Energy has a basic tariff of 3%, which limits further reductions, but we can lower the allocated tariff for food products by up to 40%, and this time we have reduced it by about 20-30%. The impact on consumers may be affected by distribution margins, so we plan to strengthen checks in the distribution process to prevent profit exploitation through allocated tariffs."
The Ministry of Finance plans to submit amendments to the 'Regulations on the Application of Allocated Tariffs' and the 'Enforcement Decree of the Individual Consumption Tax Act' to the Cabinet Council, aiming for implementation starting July 1. Additionally, the 17 food raw materials will be designated as key items for allocated tariff management to ensure that the benefits of the tax rate reduction are directly passed on to consumers through enhanced distribution checks.
* This article has been translated by AI.
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