The Finance Ministry has clarified its position that policymakers will not raise taxes on the wealthiest 1 percent of the working population.

During the National Assembly’s audit of the ministry on Thursday, Deputy Prime Minister and Finance Minister Hyun Oh-seok said that he was skeptical about tax hikes on the rich.

Hyun said he shared the view of Rep. Yoon Jin-sik of the ruling Saenuri Party, who said that “further increasing the tax burden of the upper 1 percent is in breach of the taxation system.”

Yoon argued that “the 1 percent upper stratum in Korea is bearing a higher tax burden than in foreign countries.”

The finance minister’s clarification came as lawmakers and economists are debating whether or not to push for income tax hikes on high-income households.

The debate became heated after President Park Geun-hye hinted last month that the administration could later review the necessity of raising income taxes, during her trilateral meeting with ruling and main opposition party leaders.

Market observers, however, said the president’s remarks were theoretical. Some downplayed the possibility in reflection of the basic idea that the incumbent administration would ultimately seek to avoid angering the rich.

Regarding corporate taxation, Hyun said the government would seek to simplify the three current earnings-based tax brackets down to two.

Under the current system, a 22 percent tax is levied on companies whose earnings exceed 20 billion won ($18 million), 20 percent on those earning between 200 million won and 20 billion won, and 10 percent on those with less than 200 million won.

Meanwhile, Financial Services Commission chairman Shin Je-yoon admitted the financial regulators’ supervision failure over the liquidity crisis at Tong Yang Group.

“I admit that there were negligent factors (in formerly supervising Tong Yang Group). In the wake of the Tong Yang incident, we will take appropriate measures to protect financial consumers,” Shin told lawmakers during the parliamentary audit on the FSC on the same day.

Appearing on the audit spot as a witness, Tong Yang chairman Hyun Jae-hyun claimed that applying for court receivership was the group’s best choice for the five debt-saddled Tong Yang affiliates.

Hyun has been placed under prosecutors’ investigation for his alleged ethical breach in victimizing a huge number of retail investors.

By Kim Yon-se (kys@heraldcorp.com)