Hybrid and Eco-friendly Vehicle Tax Benefits Likely to Be Extended for Over 2 Years

Ministry of Environment "Discussing with Relevant Ministries on Postponing the Exclusion Timing of Low-Emission Vehicles"

[Sejong=Asia Economy Reporters Joo Sang-don, Moon Chae-seok] It has been confirmed that the government is considering postponing the timing of excluding hybrid vehicles from eco-friendly cars from 2023 to a later date. The possibility of extending the individual consumption tax reduction benefits for hybrid vehicles, currently being discussed by both ruling and opposition parties, for three more years starting next year has also increased.

A government official said on the 15th, "The Ministry of Environment and the Ministry of Trade, Industry and Energy are discussing whether to exclude hybrid vehicles from the low-emission vehicle category," adding, "Originally, hybrid vehicles were to be recognized as low-emission vehicles only until 2022, but this timing may be delayed."

The Ministry of Environment had set a policy in the 2019 'Comprehensive Plan for Fine Dust Management (2020?2024)' to exclude hybrid vehicles from the target vehicle types for the low-emission vehicle supply target system starting January 1, 2023. They also announced specific plans to amend the Air Quality Preservation Act to this end. However, related industries have emphasized that excluding hybrid vehicles from eco-friendly cars would impose a significant burden, given that the supply of zero-emission vehicles such as electric cars is still low.

The Ministry of Environment's change in stance is related to the ruling and opposition parties beginning discussions from this day on extending the sunset clause for the individual consumption tax reduction on hybrid vehicles. The ruling and opposition parties have started discussions in the Tax Subcommittee of the Planning and Finance Committee on a revision to the Restriction of Special Taxation Act to apply the hybrid vehicle individual consumption tax reduction benefit for up to four years starting next year. However, many opinions suggested that it would be difficult to extend the application period due to the Ministry of Environment's policy to exclude hybrid vehicles from eco-friendly cars starting in 2023. A Ministry of Environment official said, "We plan to establish eco-friendly vehicle standards under the Air Quality Preservation Act through consultations with the Ministry of Trade, Industry and Energy in line with the extension of the sunset clause for the individual consumption tax reduction benefit for hybrids currently being discussed in the National Assembly."

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