▲ Seoul city buses (The photo above is not directly related to the article.)
The Seoul Metropolitan Government announced that it will join forces with 15 other local governments across the country to take joint action to maintain the special value-added tax (VAT) exemption for eco-friendly city and village buses.
Concerns have been raised that the eco-friendly bus VAT exemption benefits could end prematurely due to an amendment to the Restriction of Special Taxation Act currently pending in the National Assembly.
Seoul explained that bus transport companies and local governments are joining forces to alleviate financial burdens and stably promote policies transitioning to eco-friendly public transportation.
Under current laws, the special VAT exemption for the supply of eco-friendly city and village buses, such as electric and hydrogen buses, was scheduled to remain in effect until December 31, 2028. However, if the government's legislative amendment passes, it will end early on December 31 of this year.
Local governments nationwide maintain the position that the push to reduce tax benefits threatens to undermine the policy of transitioning to eco-friendly buses.
In particular, with the production of CNG (compressed natural gas) buses halting starting next year, making the transition to eco-friendly buses mandatory, they are concerned that vehicle price increases will disrupt the introduction of eco-friendly buses.
The city expressed concern, stating, "Transport companies with fragile finances, in particular (such as privately operated village buses), will face an increase of tens of millions of won in initial cost burdens, forcing them to avoid introducing eco-friendly buses altogether, reduce replacement volumes, or extend the operation of aging vehicles."
Accordingly, the 16 local governments, including Seoul, shared the view that continued government support is necessary for the stable implementation of eco-friendly bus transition policies and the maintenance of public transportation services, and decided to jointly urge the central government and the National Assembly on the following matters.
Yeo Jang-kwon, head of the Seoul Metropolitan Government's Transportation Office, stated, "As the transition to eco-friendly buses is a core policy directly connected to the quality of life of citizens, continued attention and institutional backing from the central government are essential." He added, "We will respond with one mind with local governments to guarantee citizens' stable right to mobility and build a sustainable public transportation system."
(Photo: Yonhap News)
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