Employees upset over new tax return regulations

By Kim Jae-won

Wage earners said Monday that they were upset over new tax return regulations, which they claim are “exploiting” employees rather than targeting high-income professionals.

A 42-year-old with the surname Shin who works at a bank in Seoul said that she found no reason to pay such taxes.

“I feel betrayed that the government is targeting employees in tax returns, cutting many benefits for us. I hope the government will turn its eyes to rich people rather than focusing on poor employees,” said Shin, asking not to be identified.

The Ministry of Strategy and Finance changed its tax return rules in September 2012, and applied them to incomes earned in 2014 for the first time. The essence of the change is to replace income deductions with tax deductions, leading to more burdens on employees who have benefited from low income tax standards thanks to the deductions.

Shin said that she could not understand the direction of the changes because it seems no one benefits from the “reforms.”

“Both employees with children and single women say they will be paying more than before. I cannot understand for whom the government has changed the rules.”

Lim Soo-hyang, 34, a former assistant accountant who filed income tax returns for Target Corp.’s Seoul office, pointed out structural loopholes in the tax return.

“The current tax return program is designed to be unfair on employees, compared to business owners. I hope the government reforms these problems first.”

Lim said that the government can check out all the incomes of employees transparently while those of business owners and professionals rely on their reports.

According to the Korea Taxpayers’ Association, a non-government organization, an average employee with 50 million won ($46,000) of annual income should pay 1.8 million won of income tax this year, up 300,000 won, or 20 percent from a year ago due to the changed regulations.

Such sentiments are quite different from before. Formerly, this season was the time of “unexpected bonuses,” or “salaries of the 13th month” when more than 10 million employees prepared to file their tax returns, expecting to get refunds from the tax agency.

With complaints rising, Finance Minister Choi Kyung-hwan has tried to calm down employees, saying the government will improve the regulations if there is something to change.

“We will improve and develop the tax return regulations, if we find something to change,” Choi said in a meeting with senior tax officials at the National Tax Service in Sejong.

The finance minister recognized the anger of taxpayers, but argued that the new regulations were introduced to impose more taxes on high-income earners and less on low-income families. The ministry said that only the top 10 percent of employees would pay more income tax while others would benefit.