By Choi Ha-young
The main opposition Liberty Korea Party (LKP) is drawing public criticism after it submitted a bill Wednesday to slash cigarette taxes to lower the average price per pack to 2,500 won from the current 4,500 won.
This is largely viewed as a politically oriented attempt to spur public resistance against the ruling camp’s move to increase taxes on high-income earners and conglomerates. The Saenuri Party, the predecessor to the LKP, was the ruling party when the Park Geun-hye administration raised the tobacco price to the current level in 2015.
Tax revenue from tobacco sales doubled from 6.9 trillion won in 2014 to 12.4 trillion won in 2016. The smoking rate dropped slightly following the price hike, but rebounded soon after. In 2016, 3.66 billion packs were sold in the country, much more than the 2.87 billion packs the Park administration predicted.
Even many smokers are now criticizing the LKP, saying it is taking them “hostage” for its own political interests.
Messages denouncing the party’s move flooded online communities.
“The LKP should pay back the 5 trillion won that the Park administration collected in additional taxes by raising cigarette prices. This is the only way to prove its sincerity,” Facebook user Kim Joon-su wrote.
A Naver user wrote, “Well done LKP. Keep it up, and then the party will be extinct before the next general election.”
In 2015, the conservative government was criticized for reaping greater taxes from low-income people, instead of raising taxes on high-income earners and family-run conglomerates.
The LKP admitted its previous misjudgment Thursday. “Cigarettes sales have recovered and it turned out a higher price is not effective in lowering the smoking rate. Since many smokers aren’t rich, it was a de facto tax hike on a humble middle class,” LKP spokesman Rep. Choung Tae-ok said in a radio interview.
On the same day, party chief Hong Joon-pyo called for the ruling Democratic Party of Korea (DPK) to cooperate on the bill. “It is ironic the DPK opposes a tax reduction for the common people,” he said in a regular meeting. The LKP claimed Hong, the party’s former presidential candidate, pledged the cut and it has long been discussed in the party to ease the people’s tax burden.
The ruling DPK lambasted the offer. “We cannot take it as it is,” Rep. Chun Jae-soo said on a radio program Thursday. “It seems like the LKP looks down on citizens. They are just attempting to nullify President Moon Jae-in’s tax hike.”
In recent days, President Moon and the DPK have been jointly moving toward a tax hike on the rich.
This is in line with the President’s attempts to create jobs in the public sector and boost the domestic economy, which requires more government expenditure.
On Saturday, the administration managed to pass an 11.03 trillion won supplementary budget bill to cover this.
Moon’s tax hike on the “super rich” is backed by 86 percent of citizens according to a Realmeter poll issued Monday. Only 10 percent of respondents were against it, giving the liberal President momentum to push for tax reform.
Conservative President Lee Myung-bak (2008-13) cut the corporate tax rate from 25 percent to 22 percent and Moon is trying to undo this. DPK Chairwoman Choo Mi-ae told reporters Wednesday the ruling party is drawing up a new tax system to increase the income tax rate from 40 percent to 42 percent for those earning over 500 million won annually, and from 38 percent to 40 percent for those earning between 300 million to 500 million won per year.