Imported Cars Twice as Expensive as the Grandeur but with Lower Automobile Taxes

[Asia Economy Reporter Changhwan Lee] It has been revealed that luxury imported cars are priced twice as high as large domestic cars, yet they are actually subject to lower automobile taxes.

According to the office of Koo Ja-geun, a member of the People Power Party, on the 30th, the automobile tax for the Grandeur is 649,000 KRW, which is more expensive than the 519,000 KRW imposed on the BMW 5 Series.

The BMW 5 Series starts at 64.3 million KRW, nearly twice as expensive as the Grandeur 2.5 Gasoline Premium (33.03 million KRW), but its automobile tax is about 130,000 KRW cheaper than the Grandeur. Other luxury imported cars such as Mercedes-Benz and Audi show similar trends.

This is because the automobile tax is levied based on engine displacement rather than the car price.

Under the current automobile tax system, according to Article 127 of the Local Tax Act, for non-commercial use, the tax amount is calculated by multiplying the engine displacement by a tax rate. For engine displacements up to 1000cc, the rate is 80 KRW per cc; up to 1600cc, 140 KRW per cc; and over 1600cc, 200 KRW per cc.

Therefore, the Grandeur, with an engine displacement of 2497cc, pays more automobile tax than the BMW 5 Series, which has 1998cc.

The National Assembly is expected to recognize this fairness issue in automobile tax and discuss revising the tax base.

Representative Koo plans to propose the "Partial Amendment to the Local Tax Act," which would change the automobile tax base from engine displacement to car price and provide reductions for excessive automobile taxes.