The ruling Saenuri Party on Wednesday called on the government to revamp the country's tax system so more funds can be generated to finance future social security projects.
In a meeting with Finance Minister Bahk Jae-wan, Saenuri lawmakers stressed there is a need to adjust the country's tax system, and asked policymakers to submit a plan that can be reviewed by parliament.
The recommendations come as the party expressed reservations about tax code changes made late last year that raised the highest income tax bracket to only affect people who made over 300 million won (US$250,000) per year, up from 88 million won in the past.
Saenuri said the increase was excessive and called for the highest tax bracket limit to be lowered to around 200 million won so more affluent people pay a greater amount of income tax.
In addition, the party said it is looking into the feasibility of marking up the highest tax rate for top income earners from 38 percent to 40 percent of their taxable earnings.
Adjusting tax rules can increase state revenue that can be used to expand Seoul's social welfare coverage.
The party said the government should also consider increasing individual consumption taxes for expensive clothes, extravagant weddings and other luxury products. The finance ministry already said it will raise taxes for expensive designer handbags.
Saenuri, however, called on the government to take active measures to lower taxes on the sale of homes to help boost the country's real estate market, which is experiencing a serious slump.
Related to the request, Bahk told lawmakers Seoul is moving to change the tax system to reduce the burden on lower income households and meet the need to upgrade the country's social security net that will be strained by the rapidly aging population.
The finance ministry is expected to announce an updated tax system later in the day.
The minister added, without going into details, that the government will take steps to collect more taxes on financial assets that have generally been exempt from heavy taxation in the past. (Yonhap)