By Kang Hyun-kyung
Staff Reporter
Leaders of the governing Grand National Party (GNP) and the largest opposition Democratic Party (DP) agreed Friday to pass the government's budget by Dec. 12.
The two sides successfully ironed out their differences on the timing of the vote through the mediation of National Assembly speaker Kim Hyong-o and DP leader Chung Sye-kyun.
In a meeting with Kim, Chung Sye-kyun pledged to cooperate with the GNP so as to pass the bill by the target date.
``The DP leader met Kim to make clear his party's willingness to vote on the bill and it will be inappropriate for our party to turn it down,'' said GNP Chairman Park Hee-tae.
Legislators passed the legal deadline for the budget vote on Dec. 2.
Despite the accord, the parties still face a tough job of narrowing their differences over the budget allocation.
The governing party is seeking a bold tax cut to stimulate the economy, but the opposition DP warns over worsening fiscal soundness.
GNP floor leader Hong Jun-pyo said unless the deadline is met this time, his party, which has 172 seats out of the 299-member National Assembly, would railroad the budget and the tax-cut bills.
In a separate move, the National Assembly Finance Committee passed a bill on cutting income tax and the property tax on luxury homes, Friday. However, committee members from both parties agreed not to revise the inheritance, donation and value added taxes at this time.
The property tax on the rich, often called the comprehensive property tax, will see its rate fall to 0.5-2 percent from the current 1-3 percent. The tax is levied on owners of homes valued at 600 million won or over, but from next year the threshold will be raised to 900 million won for one-home owners. People who have owned luxury homes for more than eight years and those retired aged 60 and above will enjoy an additional deduction of 10-30 percent of the taxable amount.
The income tax rate will fall by 2 percentage points for those whose annual wage is less than 88 million won. The corporate tax rate will fall to 10 percent from the current 13 percent for income lower than 200 million won.
For income over 200 million won, the rate will be reduced to 20 percent from the current 25 percent in two years time, according to the bill.