Bus, Taxi Firms to Get Tax Cut
By Yoon Ja-young
Staff Reporter
Bus, truck and taxi companies, and Internet cafes will pay less tax than before. Around 600,000 small businesses and self-employed people are expected to enjoy a tax cut, as the government tries to decrease the burden on people suffering from oil price hikes and the economic recession.
The National Tax Service (NTS) said Tuesday that it had moderated the rate applied to expenses for businesses that are not required to do bookkeeping. The government, which has no idea how much actually they spend as expenses, applies a set rate for such businesses in calculating their income.
The tax agency said they analyzed expenses of businesses that do bookkeeping and sample studies to come up with the reduction.
Over 200 business categories, including moving companies, bus, truck, taxi businesses, insurance sales, delivery services and driving schools had their expenses raised due to the oil price hike. The government explained that the ratio of spending on oil compared to income is higher in these business categories than others. Since the government regards their operation expenses as having risen, they will pay less in tax.
A taxi driver with a 35 million won annual income, for example, would pay 109,200 won less annually if the expense rate reduction is raised by 10 percent.
Eighteen business categories, including pig farmers and Internet cafes, had their expenses deduction rates raised after the government determined that their income had decreased.
The tax agency expected some 600,000 small businesses to benefit from the tax reduction.
Some businesses, including oil product wholesalers, gas stations, health food shops and motels, meanwhile, had their deduction rates reduced, as the government decided their business conditions had improved.