The Ministry of Economy and Finance announced the flexible tax rate plan for the first half of 2026. The proposed amendment to the Enforcement Decree is scheduled to take effect on January 1, 2026, after review by the Cabinet Council.
- The automobile individual consumption tax cut (from 5% to 3.5%, with a reduction limit of KRW 1,000,000, or KRW 1,430,000 including the education tax and value-added tax) is extended by 6 months to June 30, 2026 and then ends.
- The fuel tax cut (7% for gasoline, 10% for diesel and LPG butane) is extended by 2 months to February 28, 2026.
- The individual consumption tax cut on power generation fuel (LNG and bituminous coal for power generation) ends at the end of December 2025.
Source: Korea Policy Briefing, Ministry of Economy and Finance press release (December 24, 2025)