ID :
76954
Wed, 08/26/2009 - 08:42
Auther :
Shortlink :
https://www.oananews.org//node/76954
The shortlink copeid
S. Korea seeks to boost tax revenue amid signs of recovery
SEOUL, Aug. 25 (Yonhap) -- South Korea announced Tuesday a series of measures to boost tax revenue to ease the government's fiscal deficit amid signs the economy is rebounding from its worst downturn in more than a decade.
The measures, which abolished some tax exemptions for high-income earners and big
companies, will increase tax revenues by 10.5 trillion won (US$8.41 billion) over
the next three years, the Ministry of Strategy and Finance said in a statement.
As part of the government's measures, the minimum rate on corporate income tax
will be raised to 15 percent from the current 14 percent, according to the
statement.
While the government scrapped tax benefits for those in high income brackets and
big firms, it extended tax breaks for small and medium-sized firms and low-income
earners.
"The measures are aimed at improving the government's fiscal soundness while
reducing difficulties for low- and middle-income people," Finance Minister Yoon
Jeong-hyun told reporters.
"The government will make efforts to regain fiscal stability within a scope that
won't clash with the currency policy for the sake of economic recovery," Yoon
said.
The government expects state debt to rise to 366 trillion won by the end of this
year as it spent heavily to prop up the economy.
The tax measures still require approval by the National Assembly, where the
conservative Grand National Party holds a majority.
Business groups expressed concerns as the government's measures would scrap tax
incentives for big companies that are spending on building new plants.
"Given the point that revitalizing corporate investment is essential to support
the economy, it is inappropriate for the government to abolish the tax
incentives," the Federation of Korean Industries, the nation's largest business
lobby, said in a statement.
Hit hard by the global economic crisis, South Korea's export-oriented economy has
been grappling with its worst downturn since the 1997-98 Asian financial
meltdown.
The economy expanded 2.3 percent in the second quarter of this year, compared
with a 0.1-percent gain in the first quarter and a 5.1-percent contraction in the
final quarter of last year.
Early this month, the Bank of Korea kept its benchmark interest rate unchanged at
a record low of two percent for a sixth consecutive month.
(END)
The measures, which abolished some tax exemptions for high-income earners and big
companies, will increase tax revenues by 10.5 trillion won (US$8.41 billion) over
the next three years, the Ministry of Strategy and Finance said in a statement.
As part of the government's measures, the minimum rate on corporate income tax
will be raised to 15 percent from the current 14 percent, according to the
statement.
While the government scrapped tax benefits for those in high income brackets and
big firms, it extended tax breaks for small and medium-sized firms and low-income
earners.
"The measures are aimed at improving the government's fiscal soundness while
reducing difficulties for low- and middle-income people," Finance Minister Yoon
Jeong-hyun told reporters.
"The government will make efforts to regain fiscal stability within a scope that
won't clash with the currency policy for the sake of economic recovery," Yoon
said.
The government expects state debt to rise to 366 trillion won by the end of this
year as it spent heavily to prop up the economy.
The tax measures still require approval by the National Assembly, where the
conservative Grand National Party holds a majority.
Business groups expressed concerns as the government's measures would scrap tax
incentives for big companies that are spending on building new plants.
"Given the point that revitalizing corporate investment is essential to support
the economy, it is inappropriate for the government to abolish the tax
incentives," the Federation of Korean Industries, the nation's largest business
lobby, said in a statement.
Hit hard by the global economic crisis, South Korea's export-oriented economy has
been grappling with its worst downturn since the 1997-98 Asian financial
meltdown.
The economy expanded 2.3 percent in the second quarter of this year, compared
with a 0.1-percent gain in the first quarter and a 5.1-percent contraction in the
final quarter of last year.
Early this month, the Bank of Korea kept its benchmark interest rate unchanged at
a record low of two percent for a sixth consecutive month.
(END)
