Abstract

This study conducts revenue projections to redesign Korea’s automobile taxation system in line with the nation’s 2050 carbon－neutral target and the rapid shift toward electrification. For the acquisition stage, we retain the individual consumption tax (ICT) only on high－priced vehicles (factory price above KRW 40 million) and offset the resulting revenue shortfall for lower－priced vehicles through a CO2－indexed acquisition tax. For the ownership stage, we construct six long－term revenue－simulation models (2022－2050) that combine three variables－vehicle price, CO2 emissions, and curb weight－under various single－ and composite－criterion schemes. The baseline dataset comprises 1.5 million 2021 vehicle registrations and deregistrations, supplemented with Korea Automobile Manufacturers Association statistics；penetration rates of eco－friendly vehicles and age－related depreciation factors are also incorporated. The findings of this study are as follows. First, Acquisition stage：The CO2－indexed option preserves revenue neutrality through 2042 while providing a clear carbon－reduction incentive. Keeping the ICT on vehicles priced above KRW 40 million and introducing the CO2－indexed acquisition tax achieve both revenue neutrality and carbon－mitigation effectiveness up to 2042. Second, Ownership stage：A singlecriterion weight－based tax maximizes revenue but weakens environmental incentives, whereas Composite Model Ⅲ(price：CO2：weight＝4：3：3) secures the most stable revenue stream while balancing equity and environmental objectives. Under the 4： 3：3 composite standard, annual revenue stabilizes at roughly KRW 6 trillion after 2037, outperforming single－criterion schemes in terms of stability, fairness, and ecological effectiveness. Given the rapid erosion of the internal－combustion tax base, we propose an integrated model that combines (ⅰ) “ICT limited to high－priced vehicles＋CO2－indexed acquisition tax” and (ⅱ) an ownership tax based on the 4：3：3 composite of price, CO2 emissions, and weight. A staged roadmap is recommended：legal and system overhaul by 2027, acquisition－tax reform by 2030, and full implementation of the new ownership tax by 2032. Complementary measures include relief for low－income households and mileage－based road－use charges. While the reform’s macroeconomic ramifications－especially for the automotive sector－must be carefully weighed, this study offers a practical tax－restructuring scenario capable of simultaneously safeguarding revenue, reducing carbon emissions, and maintaining social acceptability, thereby informing the development of a comprehensive green－tax roadmap around 2030.

Keywords

• Automobile Taxation
• Carbon Neutrality
• Revenue Projection
• Green Taxation

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