The ruling party and the government are reviewing a plan to expand the sales tax credit for gas stations to support the industry's losses from the Middle East war. The measure was proposed as an alternative after the card industry balked at the gas station industry's request to lower card processing fees.
According to the Democratic Party's Special Committee on Economic Response to the Middle East War held at the National Assembly on Tuesday, the gas station industry requested that the card processing fee rate, currently around 1.5%, be lowered to 0.8%. However, the card industry rejected the request, saying its profitability has deteriorated as funding costs and delinquency rates have risen amid the recent Middle East war. The yield on specialized credit finance bonds rose from 3.585% at the end of February to 4.080% at the end of April. The card industry also expressed concern that a fee cut for a specific sector could prompt similar demands from other industries.
In response, the ruling party and the government decided to review tax reform measures, including expanding the sales tax credit for the gas station industry, as an alternative to lowering card fees. The Financial Services Commission (FSC) reported a plan to expand the sales tax credit for gas stations, taking into account the card industry's views. "Measures to ease the tax credit criteria or raise the deduction limit were discussed," an official from the Middle East committee said.
Separately, the Ministry of Climate, Energy and Environment reported to the committee that it is reviewing mandating the use of at least 50% recycled materials in the production of volume-based garbage bags in response to a naphtha supply shortage. The ruling party and the government decided to launch a revision of the Wastes Control Act for this purpose. The mandatory recycled content ratio is reportedly set to be expanded in stages, from 50% in 2027 to 80% in 2030. The government will also push to grant incentives, including higher loan limits and lower interest rates, to recycled material producers. "We plan to encourage the actual production ratio in the field to approach 50% within this year," Rep. Ahn Do-geol of the Democratic Party, the committee's secretary, said.
The committee also reviewed the supply status of medical products. "The current inventory of syringes has been confirmed to be similar to or even higher than last year's level," Ahn said.
