ID :
50637
Mon, 03/16/2009 - 07:53
Auther :
Shortlink :
https://www.oananews.org//node/50637
The shortlink copeid
(LEAD) Gov't seeks diverse tax benefits to stimulate economy
SEOUL, March 15 (Yonhap) -- The government said Sunday it will offer tax cuts to companies selling their assets to pay financial debts as part of an effort to speed up corporate restructuring and help businesses brace for a protracted economic slowdown.
Tax benefits will also be given to companies and workers participating in a
state-backed "job sharing" drive, while taxes on property transactions by
multiple home and land owners will be reduced to boost the sluggish construction
sector.
Those measures are among the tax revisions that the Finance Ministry will submit
to the National Assembly in April, aiming to bolster the economy and help those
hardest-hit by the ongoing worldwide recession.
"To stimulate the economy and stabilize the livelihoods of ordinary people, we
will strengthen tax support mostly in areas where preemptive and direct help is
needed," the ministry said in a statement. "(The tax cuts) will mainly aim to
accelerate corporate restructuring, normalize the housing market and encourage
job sharing."
Under the measures, companies that sell their assets for debt payment can delay
paying taxes for three years on income from the transactions. After the
three-year grace period, they are allowed to settle the bills in installments.
In a related move, the government will also provide tax cuts to major
shareholders who donate their assets to help their companies pay for corporate
debts. Companies will also be allowed to delay donation-linked taxes for three
years.
Capital reduction and asset sales by large shareholders are also subject to tax
benefits if the moves are intended to improve corporate ownership structure or
the financial soundness of a struggling company, according to the ministry.
Shipping lines will pay taxes based on their earnings temporarily until the end
of 2010, instead of on the current tonnage-based taxation, which generally causes
them to pay more when the economy is in a downturn.
As part of efforts to stimulate the real-estate market and help companies secure
needed funds more easily, the government will ease tax rates on firms and
individuals who sell their non-business properties.
Multiple homeowners will also see their tax burdens reduced when they sell their
properties. Currently, those with two homes must pay 50 percent of the capital
gains from selling their property and those with three have to pay 60 percent.
Those rates will be lowered to between 6 and 35 percent.
"Tax rates have been too high for multiple home owners and companies holding
non-business properties, seriously distorting the nation's real-estate market,"
the ministry said. "It has caused companies to have difficulty in securing needed
capital and also served as a huge road block for normalization of the domestic
housing market."
Business leaders welcomed the measures, saying they are "timely" and
"appropriate" at a time when large-scale restructuring is vital to survival.
"We want those measures to be passed as soon as possible to help enhance
corporate competitiveness and stabilize people's livelihoods," said an official
at the Korea Chamber of Commerce & Industry.
In a bid to slow the pace of job loss, the government will offer tax benefits not
only to companies but also to employees joining in job sharing efforts, under
which firms cut the salaries of existing employees and use the savings to
maintain payrolls or recruit more, the ministry said.
Small- and medium-sized companies introducing job sharing will have their
corporate taxes reduced, while workers participating in the scheme will receive
benefits including income tax cuts.
Tax benefits announced earlier by the government to stimulate the influx of
foreign capital into the domestic bond markets will also be included in the tax
revisions, the ministry said.
Foreigners will not have to pay interest income on their investments in state and
currency bonds. The government expects that the measure will bolster demand for
state bonds and reduce overall borrowing costs.
The ministry will also give tax reductions to ethnic Koreans buying houses in
South Korea to spur overseas investment in the struggling housing market. Weak
demand has resulted in record-high numbers of unsold apartments.
kokobj@yna.co.kr
(END)
Tax benefits will also be given to companies and workers participating in a
state-backed "job sharing" drive, while taxes on property transactions by
multiple home and land owners will be reduced to boost the sluggish construction
sector.
Those measures are among the tax revisions that the Finance Ministry will submit
to the National Assembly in April, aiming to bolster the economy and help those
hardest-hit by the ongoing worldwide recession.
"To stimulate the economy and stabilize the livelihoods of ordinary people, we
will strengthen tax support mostly in areas where preemptive and direct help is
needed," the ministry said in a statement. "(The tax cuts) will mainly aim to
accelerate corporate restructuring, normalize the housing market and encourage
job sharing."
Under the measures, companies that sell their assets for debt payment can delay
paying taxes for three years on income from the transactions. After the
three-year grace period, they are allowed to settle the bills in installments.
In a related move, the government will also provide tax cuts to major
shareholders who donate their assets to help their companies pay for corporate
debts. Companies will also be allowed to delay donation-linked taxes for three
years.
Capital reduction and asset sales by large shareholders are also subject to tax
benefits if the moves are intended to improve corporate ownership structure or
the financial soundness of a struggling company, according to the ministry.
Shipping lines will pay taxes based on their earnings temporarily until the end
of 2010, instead of on the current tonnage-based taxation, which generally causes
them to pay more when the economy is in a downturn.
As part of efforts to stimulate the real-estate market and help companies secure
needed funds more easily, the government will ease tax rates on firms and
individuals who sell their non-business properties.
Multiple homeowners will also see their tax burdens reduced when they sell their
properties. Currently, those with two homes must pay 50 percent of the capital
gains from selling their property and those with three have to pay 60 percent.
Those rates will be lowered to between 6 and 35 percent.
"Tax rates have been too high for multiple home owners and companies holding
non-business properties, seriously distorting the nation's real-estate market,"
the ministry said. "It has caused companies to have difficulty in securing needed
capital and also served as a huge road block for normalization of the domestic
housing market."
Business leaders welcomed the measures, saying they are "timely" and
"appropriate" at a time when large-scale restructuring is vital to survival.
"We want those measures to be passed as soon as possible to help enhance
corporate competitiveness and stabilize people's livelihoods," said an official
at the Korea Chamber of Commerce & Industry.
In a bid to slow the pace of job loss, the government will offer tax benefits not
only to companies but also to employees joining in job sharing efforts, under
which firms cut the salaries of existing employees and use the savings to
maintain payrolls or recruit more, the ministry said.
Small- and medium-sized companies introducing job sharing will have their
corporate taxes reduced, while workers participating in the scheme will receive
benefits including income tax cuts.
Tax benefits announced earlier by the government to stimulate the influx of
foreign capital into the domestic bond markets will also be included in the tax
revisions, the ministry said.
Foreigners will not have to pay interest income on their investments in state and
currency bonds. The government expects that the measure will bolster demand for
state bonds and reduce overall borrowing costs.
The ministry will also give tax reductions to ethnic Koreans buying houses in
South Korea to spur overseas investment in the struggling housing market. Weak
demand has resulted in record-high numbers of unsold apartments.
kokobj@yna.co.kr
(END)
