By Kim Young-jin
South Korea is speeding up efforts to introduce a special tax in preparation for the possible reunification with North Korea, according to officials at the Ministry of Unification.
“We are mapping out details on how to help finance the massive costs of potential unification with the North,” a senior official has said.
The move for the unification tax in the South has brought about protest from North Korea, claiming Seoul has been seeking the tax in its bid to absorb its northern neighbor.
The relations between the Seoul and Pyongyang have remained tense since the latter’s two deadly attacks on the South last year.
Despite the lingering tension, President Lee Myung-bak cited the need to map out a blue print and use tax payers’ money to prepare for the unification.
“It is necessary to use the tax payers’ money to cushion the unification cost, which analysts say would be astronomical,” said the official requesting anonymity.
Lee has since said that South Korea has come closer to unification with North Korea and that the event would come unexpectedly, stressing unification is not a matter of choice, but a must.
“We are considering using the tax” to partly fund unification, but “we are working on a plan in a way that would not be a big burden on working-class citizens,” the senior official said, without elaborating.
Another official handling the issue said South Korea is eyeing setting aside more than 12 trillion won ($11 billion) to cover potential unification.
The two officials made the comments in a meeting with reporters near the border with North Korea on Friday. They spoke on the condition of anonymity, citing the issue’s sensitivity.
Experts estimate it could cost South Korea more than US$1 trillion to unify with the North, whose per capita income is about 5 percent the size of the Asia’s fourth-largest economy.
Earlier this year, a dozen ruling and opposition lawmakers introduced a bill that would make it legal for South Korean taxpayers to shoulder the cost. No major progress has since been made yet.
On Saturday, the North’s official Korean Central News Agency blasted Seoul’s proposed unification tax, denouncing it as a “war tax” to realize what it claims is Seoul’s plan to invade the North.
North Korea has frequently accused South Korea and the United States of plotting to invade the North, a charge that Seoul and Washington have repeatedly denied.
