Published : Aug. 2, 2016 - 14:56
South Korea's main opposition Minjoo Party of Korea said Tuesday it will seek to raise taxes on big corporations and the high-income bracket, adding such changes are necessary for the stability of the country's financial health.
Under the move, Minjoo will seek to raise corporate taxes to 25 percent from the existing 22 percent on big companies with annual profits above 50 billion won ($45.1 million). It will also slap a 41-percent tax on individuals with an annual income above 500 million won.
Minjoo said its revision plan mainly centers on placing more burden on the upper brackets while providing more benefits to low-income earners.
Accordingly, the main opposition said it aims to give more tax benefits and subsidies to low-incomers as well as small businesses.
"The government has been seeking to bolster economic growth through tax-cuts for the rich, which has ended in failure," Rep. Byun Jae-il, a policy official from the opposition party said.
The party, however, said it is not seeking to have more salaried workers pay taxes, in an apparent bid to avoid backlash.
Around 48 percent of South Korea's salaried employees did not pay taxes as of 2014, a situation that has been cited for limiting the so-called tax base of the country that directly affects revenue. A party official said a revision is not necessary as such workers already pay indirect taxes.
South Korea's ruling Saenuri Party, however, claims it cannot accept Minjoo's plans, adding that hiking corporate taxes goes against the global trend and will only hurt growth and drive away corporate investment.
"The opposition party calls can put further strain on the national economy when every effort must be made to get companies to invest more and entice foreign firms to set up operations in the country," a party insider said. (Yonhap)