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Korean drivers pay seven times higher oil taxes per liter than U.S. drivers and twice as much as the Japanese, a Chosun Ilbo study reveals. The tax burden by income level in Korea is 25 times heavier than in the U.S., 4.4 times heavier than in Japan - and even twice as heavy as in leading welfare state Germany. In short, the Korean government levies excessive tax on oil consumption. The finding comes from a survey of gasoline prices and taxes in OECD countries conducted by the Chosun Ilbo in cooperation with energy experts including the Korea Petroleum Association.
According to data released by the American monthly oil magazine Energy Détente, the March consumer price of Korea's gasoline was W1,456 (US$1=W924) per liter, ranking 11th among the OECD nations. The U.K.¡¯s was the most expensive (W1,632), followed by Germany (W1,587) and France (W1,525). In contrast, Japan's was W1,038 and the U.S.¡¯s W693. Mexico's was the cheapest at W571. British consumers pay W1,125 per liter in tax, while Koreans pay W872 (59.9 percent), the Japanese W482, the Americans W117, and the Mexicans W94.
That means Korean consumers pay twice heavier taxes than the Japanese and 7.4 times heavier than the Americans. In the top 10 OECD countries where oil prices are high, taxes take up on average 60 to 68 percent of oil prices. But they account for 46 percent in Japan, and 16 percent in both the U.S. and Mexico. Taxes, in other words, play the biggest role in the difference in oil prices.
If the ratio of Korea's gasoline prices to income is set at 100, then Japan's is 31, the U.S.¡¯ 17, and Germany's 46. That means Korean consumers buy three times more expensive oil than the Japanese, 5.8 times than Americans, and twice than Germans when income level is factored in. If the ratio of Korea's tax burden to income is set at 100, the U.S.¡¯ is 4, Japan's 21, and Germany's 51. So Korean consumers bear 25 times heavier taxes than American consumers, five times heavier than the Japanese, and again twice than the Germans. Korean consumers' tax burden on oil is also three times heavier than in European welfare states Austria (34) and Denmark (36). Korean consumers, it is clear, effectively bear the heaviest oil tax burden in the world.
Yun Won-cheol, a professor of economics and finance at Hanyang University, said, "Taxes may be a matter of state policy choices, but Korean consumers' tax burden is too heavy by OECD standards. The country needs to lower the tax burden on consumers to boost national competitiveness."
(englishnews@chosun.com )
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