By Cho Jae-hyon
The government has decided to put a controversial plan to tax the clergy on hold for a year, the Ministry of Strategy and Finance said Thursday.
The administration originally planned to levy taxes on members of the clergy from next year.
"The decision to put off taxation to 2016 is aimed at giving certain religious groups a chance to voluntarily report their incomes," said the ministry in a statement.
The grace period of one year came after certain religious groups strongly objected to the planned taxation.
However, whether the government will carry through with the plan from 2016 remains uncertain, given that the general election is scheduled for that year and the presidential election is the following year.
The decision is part of changes to the 2014 tax code.
Under the new tax code, the government will apply a 10 percent tax credit on wage increases that exceed average gains for the preceding three years.
This tax credit drops to 5 percent for people working for large conglomerates and does not apply to senior executives and those with annual incomes exceeding 120 million won, which is roughly double the average for middle-class households.
It will cut withholding tax rates from the current 14 percent to 9 percent for listed companies that pay high dividends. "The changes to the tax code are to boost household income and get companies to invest more and pay higher dividend payments to shareholders," a ministry official said.
The government will impose a tax on companies with equity capital in excess of 50 billion won to have them increase wages for workers, make more investments and pay greater dividends instead of sitting on cash reserves.
The new tax scheme only applies to future net earnings by companies that are held in reserve. If the firms spend more on wage increases, dividend payments and investment, they will not be slapped with more taxes.
Under the revisions, small- and medium-sized enterprises (SME) will be categorized by sales numbers only instead of also taking into account the number of employees, assets and capital.
Companies will "graduate" from SME status when their assets exceed 500 billion won or if annual sales top 100 billion won. Newly classified middle-size companies will continue to get SME benefits for four years after graduation.
Among other changes to the tax code include the taxes for financial derivative products. From Jan. 1, 2016, the government will apply a 10 percent tax rate on derivative products on the KOSPI 200 futures and options and collect taxes on certain overseas derivatives.
The government will increase inheritance tax waivers for farmers who suffer losses from free trade agreements with agricultural export countries such as Canada and Australia.
Individuals will be allowed to make alcoholic beverages for special events and festivals.
The government has decided to put a controversial plan to tax the clergy on hold for a year, the Ministry of Strategy and Finance said Thursday.
The administration originally planned to levy taxes on members of the clergy from next year.
"The decision to put off taxation to 2016 is aimed at giving certain religious groups a chance to voluntarily report their incomes," said the ministry in a statement.
The grace period of one year came after certain religious groups strongly objected to the planned taxation.
However, whether the government will carry through with the plan from 2016 remains uncertain, given that the general election is scheduled for that year and the presidential election is the following year.
The decision is part of changes to the 2014 tax code.
Under the new tax code, the government will apply a 10 percent tax credit on wage increases that exceed average gains for the preceding three years.
This tax credit drops to 5 percent for people working for large conglomerates and does not apply to senior executives and those with annual incomes exceeding 120 million won, which is roughly double the average for middle-class households.
It will cut withholding tax rates from the current 14 percent to 9 percent for listed companies that pay high dividends. "The changes to the tax code are to boost household income and get companies to invest more and pay higher dividend payments to shareholders," a ministry official said.
The government will impose a tax on companies with equity capital in excess of 50 billion won to have them increase wages for workers, make more investments and pay greater dividends instead of sitting on cash reserves.
The new tax scheme only applies to future net earnings by companies that are held in reserve. If the firms spend more on wage increases, dividend payments and investment, they will not be slapped with more taxes.
Under the revisions, small- and medium-sized enterprises (SME) will be categorized by sales numbers only instead of also taking into account the number of employees, assets and capital.
Companies will "graduate" from SME status when their assets exceed 500 billion won or if annual sales top 100 billion won. Newly classified middle-size companies will continue to get SME benefits for four years after graduation.
Among other changes to the tax code include the taxes for financial derivative products. From Jan. 1, 2016, the government will apply a 10 percent tax rate on derivative products on the KOSPI 200 futures and options and collect taxes on certain overseas derivatives.
The government will increase inheritance tax waivers for farmers who suffer losses from free trade agreements with agricultural export countries such as Canada and Australia.
Individuals will be allowed to make alcoholic beverages for special events and festivals.
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