National Tax Service Considers Temporary Postponement of Oil Tax Payments by Refiners... Possible 3-Month Extension

[Asia Economy Reporter Kwangho Lee] The government is considering a temporary deferral of fuel tax payments to ease the burden on the refining industry, which is struggling due to the novel coronavirus disease (COVID-19).

On the 18th, according to the government and related industries, four major refiners?SK Energy, GS Caltex, S-Oil, and Hyundai Oilbank?requested the National Tax Service to ease the fuel tax burden, and it has been confirmed that the National Tax Service is discussing tax support measures in response.

The transportation, energy, and environment tax, collectively referred to as the fuel tax, is 529 KRW per liter (ℓ) for gasoline and 375 KRW per liter for diesel. Additionally, education tax and environment tax, amounting to 15% and 26% respectively, are added.

The amount collected by the National Tax Service through this tax is known to be about 20 trillion KRW annually (15 trillion KRW from fuel tax), averaging 1.67 trillion KRW per month (1.25 trillion KRW).

The four refiners are required to file and pay the individual consumption tax for the first quarter in April, and file and pay the transportation, energy, environment tax, and individual consumption tax for March in May. The National Tax Service is considering extending the payment deadline for the March transportation, energy, and environment tax by three months until July.

If this measure is finalized, the refining industry will be able to secure liquidity amounting to about 1 trillion KRW for approximately three months.

The refining industry estimates that the operating losses of major refiners in the first quarter of this year will reach 3 trillion KRW. This is due to reduced demand for petroleum products caused by the economic shock from COVID-19.

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