Biz body calls on parliament to revise local tax rules

Korea largest business organization called on parliament Tuesday to revise local tax rules that put undue burden on companies in an effort to create jobs.

The Korea Chamber of Commerce and Industry (KCCI) asked lawmakers to ease regional income tax codes that make it hard for small and medium enterprises (SMEs) to hire more than 50 people.

"This provision effectively causes SMEs to refrain from hiring more than 50 people because regional governments start levying extra taxes for additional workers," the KCCI claimed.

It also recommended the extension of the exemption rules for acquisition and property taxes for companies that buy real estate inside industrial complexes, and adjustments to taxes levied on land earmarked for construction of mixed-used commercial buildings.

The organization with 135,000 member companies said the tax exemption provisions on land inside industrial complexes that expire at the end of this year should be pushed back to 2015, while property taxes on land to construct new buildings must be lowered.

The KCCI pointed out that stiff taxes levied on land can lead to higher overall rent and sales prices.

"The latest recommendations reflect consensus of firms and the need for lawmakers to take the lead to help the business community cope with sluggish growth brought on by global economic uncertainties," it said.

South Korea's economic growth for this year is widely expected to fall below the 3.6 percent expansion in 2011, with the Bank of Korea predicting a gain of 3.5 percent. Other international organizations such as the International Monetary Fund and the Organization for Economic Cooperation and Development said Asia's fourth-largest economy will grow just 3.25 percent and 3.3 percent, respectively, in 2012. (Yonhap)