Rep. Eo Kigu Proposes Amendment to Restriction of Special Taxation Act to Expand Consumption of Domestic Rice

Last Year’s Per Capita Rice Consumption Hits Record Low at 56.4kg
VAT Exemption for Processed Rice Foods Containing Over 30% Domestic Rice

Assemblyman Eo Gigu. /Provided by the Assemblyman’s Office

On the 26th, National Assembly Agriculture, Food, Rural Affairs, Oceans and Fisheries Committee Chairman Uh Kigoo (Democratic Party of Korea, Dangjin-si, Chungnam) proposed a partial amendment to the 'Restriction of Special Taxation Act' aimed at expanding the consumption of domestically produced rice.

Recently, the continued decline in rice prices due to oversupply and decreasing consumption has been intensifying difficulties for farmers.

In particular, last year, the per capita rice consumption averaged 56.4 kg, which is half the amount consumed in 1993 (110.2 kg) and marks the lowest level ever recorded.

As a result, there have been ongoing calls to address the rice supply-demand imbalance by diversifying the uses of domestically produced rice.

Current law exempts value-added tax (VAT) on the supply of unprocessed rice, but imposes VAT on processed rice products.

The proposed amendment includes a provision to exempt VAT on processed rice products containing at least 30% domestically produced rice.

Processed foods made with domestic rice are often more expensive than those made with imported rice, but if VAT is exempted, they can be offered to consumers at more reasonable prices, thereby enhancing competitiveness and promoting rice consumption.

Uh Kigoo stated, "Exempting VAT on processed rice products goes beyond a simple tax policy; it is intended to maintain the production base for domestic rice," and added, "I hope this amendment will help expand rice consumption and stabilize farm income by revitalizing the domestic rice processed food industry."