South Korea’s rent-a-car industry said Tuesday that it opposes the government’s plans to raise vehicle taxes in 2015, which they claim will cause many businesses to lose money and halt operations.
According to the Korea Rent-A-Car Association (KRCA), the Ministry of Government Administration and Home Affairs announced last month that it will revise the country’s local tax rules, so fleet cars that are rented out to the same individual client or corporate entity for more than a month, will be taxed like ordinary passenger cars.
This move will compel rent-a-car companies to pay the same amount of taxes as private vehicle owners.
“The measures that will go into effect on Jan. 1, can cause the tax burden for rent-a-car companies to surge 10-fold to around 210 billion won (US$180.8 million) annually,” a KRCA official emphasized.
“The government’s move is, moreover, unfair since it has taken no such action against chartered buses, trucks and construction equipment that are usually rented for long periods of time,” he said.
At present, taxes levied per cubic centimeter of engine displacement stands at 19 won, but this can surge to 260 won.
The association argued that such a move can lead to companies bearing high tax burdens.
It pointed out that as of late October, there were 9.3 million rent-a-car businesses in the country, with a fleet of 420,000 cars.
Annual sales of these companies was last tallied at 3.5 trillion won with net profits hitting 150 billion won.
The KRCA said that unless the government reconsiders its move, rent-a-car companies may opt to turn in their business licenses and stage protests to defend their livelihoods. (Yonhap)
