S Korea seeks to raise top corporate and individual tax rates
Seoul, South Korea - South Korean President Moon Jae-in’s government plans to raise taxes on big corporations and highearning individuals as part of efforts to address inequality.
Moon’s administration will propose increasing the nominal tax rate on companies whose taxable income exceeds 200bn won (US$178mn) to 25 per cent from 22 per cent, the Finance Ministry said in a statement on Wednesday.
The income tax rate for individuals would rise to 40 per cent from 38 per cent for those earning more than 300mn won, and to 42 per cent from 40 per cent for those earning more than 500mn won.
The package of tax revisions would raise a net 5.5tn won of additional annual revenue, the ministry said. However, any revisions to tax laws need to be approved by parliament, where Moon’s Democratic Party of Korea holds only 40 per cent of the seats. The government will submit its proposal by September 1, the Finance Ministry said.
“Stable tax revenue is very important for the government to play a bigger and leading role,” Finance Minister Kim Dong-yeon said on Wednesday. “We decided it was desirable to adjust tax rates for individuals and conglomerates who are more capable.”