Charges on imports dropped on shortage items as prices soar
The government plans to extend tariff cuts for 35 out of 46 items due to expire this month and add 14 more items to the list to ease import cost burdens on local consumers, the Finance Ministry said Tuesday.
Under the plan, items such as pork, garlic, mackerel, wheat, soybean oil, sugar, and coffee will continue to enjoy lower tariffs. The 14 new import items subject to lower import tax include pigs for breeding, silicon, olive oil and sheepskin.
“We have added items currently in supply shortage to the list to stabilize price surges that began with the foot-and-mouth disease and high raw material costs,” the ministry said in a statement.
Seoul is struggling to hold its grip on energy, service and staple food prices, which are set to rise further due to uncertainties abroad. Inflation exceeded the central bank’s target for five consecutive months this year despite the government’s tariff cuts and attempts to increase crop supplies. Seoul is also importing 31,000 female pigs for breeding to replace lost livestock from foot-and-mouth disease.
The Finance Ministry is increasing the number of lower-taxed import items from 108 to 111 in the second half. A total of 130,000 metric tons of pork, the most popular red meat among locals, will continue to enjoy the tax cut.
“We expect that the latest action will contribute to curbing price hikes of related products and help boost the supply (of those materials),” the ministry said.
The plans will work to counterbalance the scheduled rise of public utility and transport costs in the next few months. Energy costs have been kept frozen under the joint effort by relevant ministries but this has been increasing deficits at major public energy corporations due to rising fuel costs.
The Finance Ministry toned down its inflation forecast earlier this month, marking a shift from earlier this year when it pushed for 5 percent growth under 3 percent inflation.
“The economy is witnessing a continued improvement in employment with inflation, including farm price hikes easing slightly,” the ministry said.
“But other indicators such as production, consumption and investment are somewhat slowing.”
By Cynthia J. Kim (email@example.com