SCT for Car to Decrease till August

Consumers who didn`t receive car after ordering due to insufficient manufacturing by motor companies can get advantage of lower special consumption tax.

Ministry of Finance and Economy stated on 29th that it decided to apply relaxing SCT of car till end of August, extending two months from existing June last, as it considered opaque economy in latter this year.

Chief of Tax Dept. in MOFE, Choi Kyoung-soo said, “ we considered uncertainty of domestic and international economic condition, and request by U.S, EU for extension of applied relaxing tax rate. And we decided so in order to solve out waiting orders, which is currently 18,000 cars”and “if there is no specific economic change, there would not be additional extension of lowering SCT”.

Due to this treatment, deducted SCT will be applied to cars that are delivered from factory till August last, such as 10 percent for above 2000 cc car, 7.5 percent for 1500~ 2000 cc cars and 5 percent for below 1500 cc.

Following this, consumers can purchase `Avante 1.5` of Hyundai 242,000 won cheap than before price including acquisition tax, registration tax, bond, ` EF Sonata 2.0` will be 572, 0000 won cheap, and `Benz 5.0` will be 9,570,000won cheap.

Hyundai motors concerned said “although period of SCT is extended, in case of Grandeur XG, Equs, Santafe and Kia Sorrento, which are overbooked will be able to be delivered after September, even it consumer apply for them now”and “people should think that they should receive car till August last, on purchasing a car”.

On the other hand, there is critical opinion on government`s extending of SCT as there are concerns about overheated economy such as economic growth in 1/4 quarters (January~March) showed 5.7 percent and domestic consumption is rapidly increasing.

Professor of Economics in Hanyang University, Na Sung- rin said, “government opted for obscure choice of two months extension due to trade pressure of U.S. and elections, despite not being confident of steady economic recovery”.

Byong-Ki Lee Joong-Hyun Park eye@donga.com sanjuck@donga.com