By Kim Tae-jong
Large companies are expected to see their minimum tax rates raised to 15 percent from the current 14 percent next year.
The decision came at a policy consultation meeting between the government and the ruling Saenuri Party at Marriott Executive Apartments in Yeouido, Seoul.
They also agreed that the base for aggregate taxation on financial income should be reduced to 30 million won from the current 40 million, which will be further lowered to 20 million in 2015.
They also agreed to set the trade commission rate for financial derivatives at 0.001 percent but have a three-year grace period considering the current market conditions.
But they decided not to push forward a plan to lower the level of minimum income subject to the highest tax rate to 200 million won from the current 300 million.
The ruling party opposed the government’s plan to lower a capital gains tax of multiple homeowners and acquisition tax, which were suggested to boost the sluggish property market.
Lawmakers of the Saenuri Party said the bills are aimed at helping boost the local economy which has been hit hard by the eurozone debt crisis.
“The bills for the revision of tax laws focused on raising budgets to keep our general election pledges and helping boost the economy amid the eurozone debt crisis,” lawmaker Na Sung-rin said during a news conference after the meeting.
Due to the increase in the minimum tax rate for corporations to 15 percent, the lawmaker expected to generate additional tax of about 100 billion won as well as to achieve more fairness in taxation.
But he emphasized that more taxes to target the rich is not right but the income tax system should be revised as it has not been changed since 1998.
“We believe we should overall reform the income tax system but the government is not yet ready for that. So we lawmakers decided to propose alternatives and those in the middle class won’t be financially damaged due to the reforms.”