South Korea to cut LNG taxes by 74% in April, raise thermal coal tax by 27%

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South Korea to cut LNG taxes by 74% in April, raise thermal coal tax by 27%

By District Energy posted 02-01-2019 13:12

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Abache Abreu and Charles Lee, S&P Global Platts

Summary

Seoul — South Korea has decided to lower taxes on LNG by as much as 74%, while raising taxes on thermal coal by 27%, from April this year as part of efforts to reduce the country's heavy reliance on coal in power generation, government officials said Friday.

"The government approved the tax rate revision so as to reduce consumption of coal blamed worsening air pollution," a senior official at the Ministry of Trade, Industry and Energy said.

Under the measure, taxes on LNG that include consumption tax and import tax will be lowered to Won 23 ($0.02) per kilograms from Won 91.4/kg currently, he said.

"Furthermore, import tax will be refunded for LNG used for combined heat and power," he said.

Whereas, taxes on thermal coal will further increase to Won 46/kg from Won 36/kg currently, he said. The rise came one year after the thermal coal taxes climbed to Won 36/kg in April last year from Won 30/kg previously.