[First Yoon Administration Livelihood Measure] Cutting Taxes to Control Inflation... Imported Pork Down 20%, Coffee Down 9.1%

Urgent Top 10 Projects for Livelihood Stabilization

[Image source=Yonhap News]

[Asia Economy Sejong=Reporter Son Seon-hee] From the second half of this year, the cost of imported pork will drop by up to 20%. The cost of coffee beans is also expected to decrease by up to 9.1%. Student loan interest rates will be frozen at the level of the first semester of this year, and property holding taxes for genuine homebuyers with one house per household will return to the 2020 level.

On the 30th, Deputy Prime Minister and Minister of Economy and Finance Choo Kyung-ho chaired the first Economic Ministers' Meeting under the Yoon Seok-yeol administration at the Government Seoul Office and announced the "Emergency Livelihood Stabilization 10 Major Projects," focusing on immediately executable tasks centered on the three key areas closely related to the lives of ordinary people: "food, living expenses, and housing." This emergency measure was introduced to soothe the increasingly difficult livelihood situation as living costs soared to the highest level since the 2008 global financial crisis, compounded by interest rate hikes.

Since the Yoon Seok-yeol administration has emphasized the principle of "market-friendly price management," most of this livelihood measure consists of tax support. The tariff rate quotas on major imported goods such as cooking oil, pork, and flour will be lowered to 0%, and value-added tax (10%) will be exempted on simply processed food products such as kimchi, doenjang, gochujang, and soy sauce, which were originally subject to tax exemption. The plan is to alleviate cost-push inflation pressures and provide sellers with the capacity to reduce prices, thereby inducing a price decline. However, whether this will lead to sufficient price reductions in the field requires follow-up management. Additionally, since all measures are temporary and valid until the end of the year, if the high inflation situation continues into next year, additional measures will need to be considered.

Regarding housing stability measures, the property holding tax burden for genuine homebuyers with one house per household will be restored to the 2020 level. The "officially assessed price realization" policy promoted during the previous Moon Jae-in administration will also be fully reconsidered. After related research and consulting, a supplementary plan will be finalized within the year. The recognition period for exemption from acquisition tax surcharges for temporary two-house owners will be extended from the existing one year to two years, and from the second half of the year, the loan-to-value ratio (LTV) cap for first-time homebuyers will be expanded to 80% (previously 60-70%).

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