Working Poor to Get Financial Aid
By Yoon Ja-young
Staff Reporter
Low-income households will receive earned income tax credit (EITC) from September. Those who bought a second home in their hometown will continue to enjoy the tax benefits that single house owners do.
The Ministry of Strategy and Finance announced the implementation of revised tax codes Thursday.
According to the ministry, households, making less than 17 million won a year will be given EITCs from September. The credit is a kind of negative income tax, in which the government gives up to 1.2 million won a year to households according to their earned income.
For example, low-income earners making less than eight million won a year will get 15,000 won for every additional 100,000 won they make. The plan was envisioned in 2006 to encourage low-income households to work and to provide financial support.
The tax revision also eased regulations on buying houses in provinces. Those who bought a second home in their provincial hometown with a population of less than 200,000 will continue to be regarded as having only one house. Currently, people who own two or more houses face a heavier capital gains tax rate when they sell, which is aimed at discouraging people from buying homes that were not for residential purposes. Following the revision, a second home in the provinces won't add to any tax burden.
The ministry expanded the tax benefits to businesses that employ handicapped people. Companies that invest in facilities that facilitate the hiring of disabled people will get seven percent of the cost deducted from their corporate or income taxes.