Extension of Local Tax Reduction by 2.3 Trillion Won... Resolution of Local Tax Special Cases Restriction Act and Enforcement Decree at Cabinet Meeting

[Asia Economy Reporter Oh Sang-do] The Ministry of the Interior and Safety announced that the revision of the 'Enforcement Decree of the Local Tax Special Cases Restriction Act,' which includes local tax reductions worth 2.3 trillion won, was approved at the Cabinet meeting on the 15th.

This enforcement decree contains detailed implementation measures for the 'Local Tax Special Cases Restriction Act' approved by the National Assembly on the 9th. The Local Tax Special Cases Restriction Act and the enforcement decree are expected to be promulgated and enforced as early as today after the President's approval.

The amendment to the Local Tax Special Cases Restriction Act redesigns local tax reductions worth about 2.3 trillion won, which expired on the 31st of last month. Originally scheduled to take effect on January 1 of this year, it was delayed due to late passage in the plenary session of the National Assembly. Accordingly, the 97 cases of acquisition tax reductions and local income tax special cases that ended at the end of last year have been subject to pre-reduction tax rates.

The Ministry of the Interior and Safety explained that if the local tax reductions are applied retroactively with the enforcement of the law, taxpayers can receive refunds including refund interest (2.1% per annum) on the reduced tax amounts already paid.

The recently approved amendments to the Local Tax Special Cases Restriction Act and enforcement decree focus on revitalizing the regional economy. First, acquisition tax and property tax reductions for small and venture companies moving into industrial complexes and knowledge industry centers will continue at the existing levels of 35-75%. Also, the acquisition tax reduction (50%) for newlyweds purchasing their first home will be extended by one year, and tax reductions for electric and hydrogen vehicles will also be extended to promote the use of eco-friendly energy.

Furthermore, the scope of joint ownership for vehicles eligible for acquisition tax and automobile tax reductions for persons with disabilities and national merit recipients has been expanded to include spouses' direct relatives and siblings, enhancing tax convenience for socially vulnerable groups.

However, considering tax equity, some local tax reductions for national public institutions such as Korea Land and Housing Corporation (LH) will be terminated.

Ko Gyu-chang, Director of the Local Finance and Economy Office at the Ministry of the Interior and Safety, said, "Since the local tax reductions are reflected in the law to be retroactive to January 1, we will cooperate with local governments to process refunds as quickly as possible."

This content was produced with the assistance of AI translation services.