A windfall tax bill imposing a 20% corporate tax on excess profits of oil refiners was introduced as fuel prices surge amid Middle East tensions.
Rep. Jang Chul-min of the Democratic Party of Korea proposed an amendment to the Corporate Tax Act on Friday, citing "growing uncertainty in international energy supply and extreme oil price volatility due to recent Middle East instability and prolonged transit risks in the Strait of Hormuz."
Under the bill, oil refiners and liquefied petroleum gas suppliers would pay an additional 20% corporate tax on income exceeding their three-year average by more than 500 million won ($360,000).
"There are limits to properly controlling the enormous excess profits of certain companies during a national energy crisis," Jang said. "Refiners are abusing their dominant market position by preemptively raising supply prices excessively, using international oil price indicators as an excuse even when actual crude import costs have not increased."
Jang added that "strong institutional controls are inevitable against excessive wealth accumulation that runs counter to the interests of the social community in the energy market, which is directly linked to the national economy."