Raising Taxes

[Anchor Lead]

The government and ruling party have passed the extra budget bill and are now pushing ahead with public discussions on raising taxes. The government and ruling camp will begin earnest talks on revising the tax code from Thursday.

[Pkg]

The government and the ruling party are to begin discussions in earnest on a tax hike.

[Soundbite] Woo Won-shik(Floor Leader, Democratic Party) : "Particular attention is called for as 178 trillion won will be needed over the next 5 years to realize campaign pledges in the social and welfare sectors."

As a start, plans to raise taxes on the wealthy appear to have been finalized. For corporate tax, a new standard of assessment will be drawn up for large firms exceeding a tax base of 200 billion won to impose a maximum rate of 25%. The maximum income tax rate will likely be raised to 42% for earnings surpassing 500 million won.

[Soundbite] Choo Mi-ae(Chairwoman, Democratic Party) : "I would like to give the name "honorable taxation" through which very big firms and the highest income earners maintain their honor and fulfill social responsibilities."

In a similar vein, tax deductions and exemptions granted to conglomerates as well as deductions in inheritance or gift taxes are also likely to be reduced. The government and ruling camp are also known to be pushing to raise the tax rate on capital income such as earnings through transactions of financial products including stocks and bonds. The two sides will hold additional talks on Thursday to revamp some 20 items of the tax code in further detail.