Seoul [South Korea], October 21 (ANI/Global Economic): The Korean government will consider cutting tariff on 90 import items, including Liquefied Natural Gas (LNG) and eggs, due to the recent inflationary pressure such as the increase in international oil prices and raw material prices.
It is analyzed that the government will temporarily lower the tariff rate on a fixed quantity of import items, which are directly related to consumer prices, for a certain period of time to stabilize prices.
According to the government authorities on October 20, related ministries such as the Ministry of Trade, Industry and Energy and the Ministry of Agriculture, Food and Rural Affairs, recently requested the Ministry of Strategy and Finance to cut tariff rates on 90 items directly related to consumer prices.
Currently, the regular demand research for tariff rate quota allocation is being conducted, and ministries reportedly asked to cut or maintain tariff on 90 import items, including LNG, LPG (liquefied petroleum gas), eggs, corn, and oats.
Tariff rate quota system refers to a system that temporarily lowers or raises tariff rate on a fixed quantity of import items for a fixed period of time. The Ministry of Economy and Finance annually conducts the demand research for tariff quota rate to be applied for a year from next year. After the research, it reviews the necessity of items requested for tariff reduction according to the procedure.
The trade ministry has asked to apply zero tariff as international LNG prices, as well as oil prices, have risen sharply, raising concerns over inflation, including utility bills.
Korea imposes three per cent basic tariff on LNG imports, and usually lowers it to two per cent between October and March, considering that the usage increases in winter.
"The recent rise in international oil and gas prices has been a burden," said Industry Minister Moon Seung-wook at the comprehensive audit of the Trade, Industry and Energy Committee held at the National Assembly. "Gas bill is also rising not only due to the oil tax hike but also due to various other factors, so we are currently discussing the tariff quota rate with related ministries after collecting opinions from the industry."
The Ministry of Agriculture, Food and Rural Affairs also asked to maintain zero tariff rates, which will be end in late this year, on imported eggs. As the international grain market is also fluctuating, with the international food price index hitting the highest level in a decade, it also requested zero tariffs on grains for animal feed. As egg prices have increased sharply this year, the government is currently applying zero tariffs on eight egg items until the end of the year.
In addition, the government is also reviewing ways to cut oil taxes. Previously, it cut oil taxes in 2008 when international oil prices exceeded 100 dollars a barrel and in 2018 and 2019, when international oil prices hit the some 80 dollars a barrel. (ANI/Global Economic)