By Kim Sung-jin
Staff Reporter
Korea’s per-capita tax burden is expected to surge by more than 1 million won to 4.47 million won in 2009 from 3.31 million won last year.
The Korean government plans to maintain the ratio of tax burden to gross national income at 19-20 percent until 2009, according to the Ministry of Finance and Economy (MOFE) and the National Assembly’s Budget Committee Thursday.
The government drafted the taxation plan based on an assumption that the gross domestic product (GDP) would grow at an average of 7.4 percent over the next four years.
With the growth projection, the government’s annual tax revenue is expected to top 200 trillion won by 2008. It expect the tax revenue to grow from 160 trillion won last year to 173 trillion won in 2006, 187 trillion won in 2007, 203 trillion won in 2008 and 219 trillion won in 2009.
Consequently, based on the National Statistical Office’s demographic estimates, the per-capita tax burden is expected to rise from 3.31 million won in 2005 to 3.56 million won in 2006, 3.85 million won in 2007, 4.16 million won in 2008 and 4.47 million won in 2009, if the government keeps the tax burden ratio at 19 percent over the next four years on average.
The Budget Committee expected the per-capita income tax burden to rise from 510,000 won in 2005 to 550,000 won in 2006, 580,000 won in 2007, 620,000-640,000 won in 2008 and 650,000-690,000 won in 2009.
However, the tax burden would differ if the Korean economy shows slower than expected economic growth in the next four years.
The tax burden issue has become a hot issue of debate after President Roh Moo-hyun hinted earlier this week about the government need for more money to fund social welfare policies aimed at tackling low birthrate and fast aging society problems.
On Wednesday, Roh said in a televised news conference that the government would mainly focus on reducing tax incentives and unnecessary state projects to secure funds required to building a solid social safety net.
However, there still looms controversy over possible tax hikes attempts by the Roh administration in the not so distant future.
sjkim@koreatimes.co.kr
