ID :
205755
Wed, 09/07/2011 - 11:29
Auther :
Shortlink :
https://oananews.org//node/205755
The shortlink copeid
(LEAD) Gov't agrees to suspend additional tax cuts
(ATTN: UPDATES throughout with details, presidential official's comments; ADDS byline)
By Chang Jae-soon
SEOUL, Sept. 7 (Yonhap) -- The government agreed Wednesday to halt additional tax cuts for high-income earners and conglomerates, a concession to the ruling party that is seeking to bolster its support from lower-income people ahead of next year's general elections.
The move represents a compromise over the ruling Grand National Party's demand that the government call off tax cuts for high earners and conglomerates altogether and use the additional income to carry out welfare measures for lower-income people.
Tax cuts have been among President Lee Myung-bak's business-friendly policies. But his party has called for the government to roll them back as it seeks to shake off its image as a party for the wealthy and conglomerates ahead of next year's parliamentary elections.
On Wednesday, officials from the party, the government and the presidential office held a meeting and reached agreement on halting additional cuts in income tax for high earners and corporate tax for big businesses, Rep. Lee Ju-young, chief policymaker of the GNP, told reporters.
Lee said, however, that corporate tax cuts for small- and medium-sized firms will continue.
Specifically, the government agreed to call off its earlier plan to offer a 2 percentage point cut in income tax for those whose annual income amounts to 88 million won (US$83,000) or more, and keep the tax rate for the bracket at 35 percent.
In addition, the government also agreed not to lower a 22 percent corporate tax rate on taxable income of 200 million or more and create a new taxable income bracket for companies ranging from 200 million won to 50 billion won and impose a 20 percent tax rate on those firms, most of which are small- and mid-sized enterprises, officials said.
These agreements will be reflected in a tax revision the government is preparing for its tax policy next year. The revision is subject to parliamentary approval.
"This is a sort of compromise that took political realities into consideration," Presidential Chief of Staff Yim Tae-hee told reporters. "We have partly reflected demands from the National Assembly, though we believe tax cuts should continue as they are a promise that has been made."
Yim stressed that more than 90 percent of companies that have benefited from tax cuts are small- and medium-sized firms, and benefits for these firms will continue, though benefits for conglomerates will be reduced as they are better off than smaller firms.
Yim also said that he believes conglomerates will understand the decision as they have expressed support for Lee's "ecosystemic development" drive calling for big firms to play greater roles in reducing social inequalities.
By Chang Jae-soon
SEOUL, Sept. 7 (Yonhap) -- The government agreed Wednesday to halt additional tax cuts for high-income earners and conglomerates, a concession to the ruling party that is seeking to bolster its support from lower-income people ahead of next year's general elections.
The move represents a compromise over the ruling Grand National Party's demand that the government call off tax cuts for high earners and conglomerates altogether and use the additional income to carry out welfare measures for lower-income people.
Tax cuts have been among President Lee Myung-bak's business-friendly policies. But his party has called for the government to roll them back as it seeks to shake off its image as a party for the wealthy and conglomerates ahead of next year's parliamentary elections.
On Wednesday, officials from the party, the government and the presidential office held a meeting and reached agreement on halting additional cuts in income tax for high earners and corporate tax for big businesses, Rep. Lee Ju-young, chief policymaker of the GNP, told reporters.
Lee said, however, that corporate tax cuts for small- and medium-sized firms will continue.
Specifically, the government agreed to call off its earlier plan to offer a 2 percentage point cut in income tax for those whose annual income amounts to 88 million won (US$83,000) or more, and keep the tax rate for the bracket at 35 percent.
In addition, the government also agreed not to lower a 22 percent corporate tax rate on taxable income of 200 million or more and create a new taxable income bracket for companies ranging from 200 million won to 50 billion won and impose a 20 percent tax rate on those firms, most of which are small- and mid-sized enterprises, officials said.
These agreements will be reflected in a tax revision the government is preparing for its tax policy next year. The revision is subject to parliamentary approval.
"This is a sort of compromise that took political realities into consideration," Presidential Chief of Staff Yim Tae-hee told reporters. "We have partly reflected demands from the National Assembly, though we believe tax cuts should continue as they are a promise that has been made."
Yim stressed that more than 90 percent of companies that have benefited from tax cuts are small- and medium-sized firms, and benefits for these firms will continue, though benefits for conglomerates will be reduced as they are better off than smaller firms.
Yim also said that he believes conglomerates will understand the decision as they have expressed support for Lee's "ecosystemic development" drive calling for big firms to play greater roles in reducing social inequalities.
