South Korea Expects to Increase Tax Take

October 13, 2009 Taxation in South Korea  No comments

The South Korean Government expects its tax collection to grow by 9.2% annually, between 2011 and 2013.

According to the report submitted by the Finance Ministry to the National Assembly of Korea, the nation will see an annual increase of approximately 9.2% in its tax collection and a 5% rise in GDP, annually between the years of 2011 and 2013. Government figures place the expected income at approximately KRW187 trillion for 2011, KRW 204 trillion in 2012 and KRW223 trillion in 2013. Plans for the increase were outlined in the submitted report, which stated “We plan to go aggressive in securing our tax sources, such as cutting tax exemption or tax reduction cases and strengthening transparency in tax collection”.

Concerns have been raised about rising difference between tax collection growth and GDP growth, and the subsequent increased burden on tax payers. Forecasts issued for 2009 saw a growth gap of only 0.6%, compared to the 4.2% predicted for the 2011 to 2013 period.

The Korean Government currently expects a 3.9% rise in tax collection for 2010, a figure of KRW6.5 trillion. The currently expected rise consists of a 9.0% rise in personal tax collection, increases value-added tax by 5.0% and a fall of 2.0% for corporate taxes.

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