Cabinet approves consumption tax cut

The administration of South Korean President Lee Myung-bak approved a measure to slash personal consumption tax, or excise tax, on automobiles by 30% by June 2009. This tax cut is designed to help boost domestic auto sales by lowering the consumption tax rate to 3.5%, from the current 5%, of the purchase price. For vehicles with 2,000 cc or higher engine capacities, the rate has been reduced to 7%, from the current 10%. The government also recently adopted other measures to help the auto sector, such as reviving the credit market for car loans. (December 30, 2008)