Presidential hopeful Lee Myung-bak of the Grand National Party presents campaign pledges on tax cuts at his office in Seoul, Monday. / Korea Times

By Yoon Won-sup
Staff Reporter

Former Seoul Mayor Lee Myung-bak said Monday as his presidential campaign pledge he will annually save 12.6 trillion won of taxpayers' money by cutting down tax rates mainly on corporate and real estate.

Lee of the main opposition Grand National Party (GNP) said he will cut down five percentage points of corporate tax to 20 percent step-by-step, which will ultimately save 7 trillion won.

The 66-year-old politician will also reduce various real estate taxes such as comprehensive real estate tax. The registration and acquisition tax on real estate will also be integrated for the tax reduction.

He will cut oil tax by 10 percentage points and exempt special excise tax of liquefied natural gas (LNG) for taxis and both special excise tax and education tax imposed on LNG for cars of the handicapped.

``It is time to overhaul our tax system in order to save our economy,'' Lee told a press conference. ``As a first step, I suggest tax reform.''

He also plans to reduce tax items from the current 30 to 14, for example, by integrating taxes of special excise, alcohol, transportation, energy, environment, leisure and tobacco into a consumption tax.

To help prevent tax evasion, he will increase fines from 40 to 100 percent while seeking to set the tenure of the National Tax Service to two years for more neutral tax administration.

``The ratio of taxation against national income was 17.9 percent under former President Kim Young-sam's administration, but it increased to 20 percent under the incumbent administration, which almost stops the economy from growing,'' Lee said.

Particularly, the tax reduction of 5.6 trillion won, which will be used for grass-root workers, small- and medium-sized companies and science investment, will be implemented as soon as possible, according to him.

Meanwhile, the corporate tax reduction will be done step-by-step in line with the overall tax reduction rate.

yoonwonsup@koreatimes.co.kr