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[H2 ECONOMIC POLICY] Tax breaks and cashback for eco-friendly goods:South Korea

[THE INVESTOR] Tax breaks for replacements of old diesel cars and high-efficiency home appliances will be rolled out in the second half of the year, the Ministry of Strategy and Finance announced on June 28.

Under the plans, those replacing diesel vehicles registered before Dec. 31, 2006 will be given a 3.5 percentage point cut in the special consumption tax of 5 percent for automobiles. 

Hyundai Motor EV Ioniq.
Hyundai Motor EV Ioniq.

The Finance Ministry said that the measure is aimed at weeding out old diesel vehicles that were sold before diesel emissions standards were raised.

According to the ministry, diesel vehicles registered before Dec. 31, 2006 produce nine times more fine particles than those produced in 2016.

The government will also review subsidizing old diesel vehicles across the country, and raising the subsidy. At present, subsidies are provided only in Seoul and surrounding regions.

In addition, a cashback program for home appliances with the highest energy efficiency rating will be introduced. Home appliances included in the measure are air conditioning units, refrigerator, television sets and air cleansers.

Those buying appliances that meet the requirements will be given about 10 percent of the price back as incentive. The program will be funded with government budget for Korea Electric Power Corp.-related projects.

By Choi He-suk (