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Gov’t says tax breaks for FCEVs will continue

June 26,2019
GOYANG, Gyeonggi - Minister of Economy and Finance Hong Nam-ki said Tuesday the government will extend tax breaks for hydrogen-powered fuel-cell electric vehicles (FCEV) as part of the government’s broader efforts to vitalize the country’s struggling auto industry.

After meeting with senior auto industry executives at Kintex in Goyang, Gyeonggi, on Tuesday, the finance minister told reporters that the government will extend individual consumption tax breaks for FCEVs due to expire by the end of this year.

The government had previously planned to end the tax break of up to 4 million won ($3,460) currently given to FCEV buyers.

“We are planning to include measures to support investment and consumption in the auto industry in the economic direction report that will be announced next Wednesday,” said Hong, adding that the extension of the tax break on FCEVs will be included in the announcement.

The measure is part of the government’s efforts to help the local auto industry that has struggled in recent years.

According to the Korea Automobile Manufacturers Association, Korea fell to seventh place in terms of auto production last year since reaching fifth place in 2000.

Hong expressed optimism for the auto industry during the meeting that included Hyundai Motor President Kong Young-woon and GM Korea Vice President Choi Jong.

“Amid the recently difficult global economic environment and slowing local investment, I have hopes to make achievements through difficult conditions,” said Hong. “I think that the auto industry is doing well, with exports last month increasing 13.6 percent.”

The Finance Ministry already said earlier this month that it will extend the discount on the individual consumption tax for vehicle purchases through the end of this year. The discount, implemented in July last year, was set to expire by the end of the month.

The government explained that domestic passenger vehicle sales rose 2.2 percent from last July to December compared to the same period the previous year.

Hong also expressed that the currency rate falling to current levels of 1,150 won to $1 was likely due to market expectations surrounding a potential meeting between the United States and China at the Group of 20 summit later this week and the U.S. Federal Open Market Committee possibly lowering the benchmark interest rate.

BY CHAE YUN-HWAN [chae.yunhwan@joongang.co.kr]