Per Capita Tax Burden to Rise to $3,770
By Lee Hyo-sik
Staff Reporter
South Koreans are expected to pay 4.53 million won per person in national and local taxes next year, up 190,000 won from this year's estimated 4.34 million won. Each salaried worker will likely pay 1.76 million won in income tax in 2010, up 90,000 won from this year.
The ratio of the tax burden to the nation's gross domestic product (GDP) is projected to reach 20.1 percent next year, slightly down from 20.5 percent this year, because of the government tax cuts and falling revenues on the global economic slump. When pension contributions and other social-security-related payments are included, the overall ratio will likely go up to 26.4 percent in 2010, remaining unchanged from this year.
According to the Ministry of Strategy and Finance on Wednesday, the government is projected to collect 171.1 trillion won in taxes in 2010, up 3.9 percent from this year's estimated 164.6 trillion won. The ministry estimated the 2010 tax revenues on projections that the economy will expand 4 percent next year.
``Despite the planned income and other tax cuts next year, we expect the 2010 tax revenue to increase on improving business conditions at home and abroad. We think each individual's tax burden is lower than 4.53 million won because corporate taxes account for a significant portion of state tax earnings,'' Deputy Strategy and Finance Minister Yoon Young-sun said.
Income tax revenues from the self-employed are expected to inch down 0.3 percent to 5.9 trillion won next year, with salaried workers' income tax payments increasing 6.2 percent to 14.2 trillion won. Each salaried employee will pay an average of 1.76 million won, up from 1.67 million won this year, on projections that nominal income will jump 5 percent and 150,000 new jobs are created.
Capital gains taxes will likely grow 22.5 percent to 8.9 trillion won, with more people buying and selling houses amid the booming housing market. Corporate income tax revenues are projected to decrease to 35.4 trillion won in 2010 from 36.1 trillion won in 2009, due to lower tax rates.
Revenues from inheritance and gift taxes, and from value-added taxes will expand 19.7 percent to 2.7 trillion won and 5 percent to 48.7 trillion won, respectively.