Government to Expand Tax-Exempt Fuel Support for Agriculture, Fisheries and Ease Regulations for Returning Companies

The government will increase support for tax-exempt fuel in the agriculture, forestry, and fisheries sectors and ease regulations for companies returning to South Korea from overseas. The government held a meeting of the emergency economic council and related ministers on economic and industrial competitiveness enhancement at the Government Complex Seoul on the 29th, judging that economic recovery will resume based on improved consumer and corporate sentiment and a rebound in exports amidst instability in the Middle East. At the meeting, Deputy Prime Minister and Minister of Economy and Finance Gu Yoon-cheol mentioned that major institutions are revising their South Korean economic growth rate forecasts upward, with the Korea Development Institute (KDI) raising its forecast from 1.9% in February to 2.5% this month, and the Bank of Korea raising its forecast from 2.0% to 2.6%, respectively.

To cope with high oil prices, the government will raise the support limit for the oil price-linked subsidy for tax-exempt fuel for agriculture and fisheries from the current 12.9% to 16.4%, providing an additional support effect of approximately 36 to 42 won per liter. The notice prohibiting hoarding and profiteering will be extended until July to stabilize the supply and demand of urea and urea solution.

Improvements to the system for companies returning to South Korea from overseas are also being pursued. Requirements for recognition will be eased, such as allowing companies that invest in core manufacturing facilities in strategic industries and supply chains to be recognized as returning companies even if they maintain and expand their overseas production bases. The subsidy support system will also be reformed. The scale of subsidies for investment projects with significant economic effects will be determined through negotiations between the government and companies, and the support process will be improved by having the central government directly disburse subsidies to companies.

In maritime safety, the government will push for the disclosure of safety investment details for high-risk vessels and the introduction of a shipping company safety rating system. In the shipbuilding sector, measures to support the issuance of refund guarantees (RG) for mid-sized shipbuilders will be prepared.