45 Billion Won Butcher Tax to Be Abolished

The government decided on April 23 to take measures in support of livestock-raising households which are expected to be hurt by the Korea-U.S. free trade agreement (KORUS FTA), including the abolition of the butchery tax.

Meanwhile, authorities instituted a quarantine on the same day on 6.4 tons of beef arriving at Incheon International Airport from the U.S. If this beef passes the quarantine, it will become the first beef imports by South Korea from the U.S. in 41 months.

The Ministry of Agriculture and Forestry announced that it plans to promote the abolition of the butchery tax in order to minimize the damage to the livestock industry following the KORUS FTA.

The butchery tax is what a livestock breeding household pays when butchering cows or pigs, the rate of which is ordinarily 1% at most of the market price of livestock. About 45 billion won is raised through this tax annually.

"Butchery taxes do not exist in governments with advanced livestock industries such as the governments of the U.S., Canada or Japan," explained the Ministry of Agriculture and Forestry. “We`re discussing the ways to eliminate this tax through coordination with related government bodies."

The Ministry of Agriculture and Forestry is also examining the expansion of the origin-marking rule for beef, which was implemented early this year targeting large restaurants over 300m² (90 pyeong), to cover small and medium sized restaurants.

It also plans to lighten the burden of households by raising the standard of the amount of income the government preserves for households when the price of beef falls below a certain level, which is set at 1.3 million won at the moment.

On April 23, the National Veterinary Research and Quarantine Service instituted a quarantine on beef that arrived at Incheon International Airport from the United States. The quarantine is expected to last about a week.

With South Korea and the U.S. agreeing on the principle to return only the box that contains beef found to include bone, it is certain that some beef imported from the U.S. will fine its way to market.

Concerning this the Minister of Agriculture and Forestry Park Hong-su said at the press gathering held on April 23, "The quarantine should be very strict. There is no way we will pass beef from the U.S. that contains bone."

jarrett@donga.com