ATJ Asian Tax Journal

Asian Tax Journal

Print ISSN 1738-3323 Online ISSN 2733-9270

A Study on Introduction Plan of Fuel Based Automobile Related Taxation －Focused on Tax System of Acquisition and Ownership Stage－

  • Ji Sun Chung 세무전문대학원 University of Seoul
  • Wan Yong Kim University of Seoul

Asian Tax Journal Vol. 13 No. 4 (2012), pp. 151-185

Abstract

While automobiles have already become a daily necessity unlike in the past, the circumstance is that the automobile related tax systems are still maintaining the system of the past. However, such taxation not only is behind in terms of the time period, but not environment friendly in the perspective that automobiles are objects that mainly discharge environment polluting substances. Also, not only is the current automobile related tax system unable to induce saving of energy consumption, but the circumstance is that it is much more behind compared to the tax systems of other countries. Most of all, while the tax systems of acquisition and ownership stages include a lot of these problems, the reorganization plan of such taxation can be summarized as follows. First, it is reasonable to abolish the individual consumption tax on automobiles at this point in time when the automobile itself has become a daily necessity. However, if abolishing is difficult,the tax rate standard of individual consumption tax must be changed to fuel economy based from the current displacement based system. Second, the method of connecting the fuel economy to the current price standard can be considered. In other words, we could think of the method of imposing additional acquisition tax on high priced low fuel efficiency automobiles. Third, the current automobile tax being imposed based on the displacement must be changed to the fuel efficiency based system. Specifically, there is a short term reorganization plan to reorganize while minimizing confusion on the current displacement based automobile tax system,a long－term reorganization plan to fully switch to the fuel efficiency based system or a method of compromising between short－term and long－term reorganization plan. Meanwhile, the tax reduction system on the age of automobile which is retrogressive on the environment must be abolished. Finally, it is necessary to pursue people to purchase substitute cars with outstanding fuel efficiency by a drastic extension of various grants related to the purchase, ownership and use of environment friendly automobiles. To make this possible, it is necessary to promote a taxation support. Meanwhile, although there are many cases of considering the tax system reorganization for improvement of fuel efficiency (fuel efficiency based) in terms of automobile related tax system and environment friendly tax system reorganization (CO2 discharge based), they actually could be called mutually complementary. Therefore, a mutually complementary research would have to be continuously performed. Through such research, the automobile related tax system is expected to be reorganized as a more reasonable way.

Keywords

  • Automobile
  • Individual Consumption Tax
  • Acquisition Tax
  • Automobile Tax
  • Fuel Efficiency

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