By Jung Sung-ki
Staff Reporter


The main opposition Grand National Party (GNP) Monday announced a package of tax reduction measures to cut taxpayers’ burden by more than 2.74 trillion won ($2.62 billion) next year.

The plan aims to lower the income tax by 2 percentage points from the current 8-35 percent to 6-33 percent.

The party also decided to work to abolish transaction tax on various items, including automobiles, ships, construction equipment and real estate, for a reduction of 7.2 trillion won by 2009.

The decision was made at a meeting between party chairwoman Park Geun-hye and GNP members of the Finance and Economy Committee of the National Assembly, party officials said.

The plan also includes measures to reduce corporate tax by imposing 10 percent on a taxable corporate income of 200 million or less and 25 percent on that of 200 million won or more.

Currently, a 25-percent tax rate is imposed on taxable corporate income of 100 million won or more, with a 13-percent rate being levied on corporate income of 100 million won or less.

The measures are expected to relieve taxpayers’ burden by more than 8.9 trillion won in the government-proposed tax plan, GNP officials said.

In August, the government presented bills to raise a number of tax rates to make up for an estimated 4.6 trillion won in revenue shortfall this year in the wake of a slower-than-expected economic recovery.

Under the plan, the price of soju, the most popular distilled liquor in Korea, will increase up to 200 won per bottle from the beginning of next year. Soju retails at between 1,000 won to 1,500.

The price of liquefied natural gas (LNG), which is widely used for heating houses, will soar to 60 won per kilogram from the current 40 won.

``The government should make up a revenue shortfall by reducing government spending next year, rather than raising taxes,’’ GNP officials said, adding the party plans to submit the tax reduction bills to the National Assembly for approval.

gallantjung@koreatimes.co.kr