Gov't to impose taxes on financial firms' interest income

SEOUL, June 17 (Yonhap) -- The government said Wednesday that it is considering
levying taxes on interest income by local financial companies as part of efforts
to raise tax revenues and improve the nation's fiscal soundness.
The Ministry of Strategy and Finance said in a statement that it plans to apply a
14 percent tax on interest income earned by local financial companies starting on
January 1 of next year.
The tax rates on interest income are to be the same as those imposed on
individuals, the self-employed and other companies in the private sector, the
ministry said.
The move comes after the ministry exempted banks and other financial firms from
the income taxes last year citing larger-than-expected tax revenues.
The reversal is due to declining tax revenues amid an economic slowdown, the
ministry said.
It also comes as South Korea is faced with a growing deficit amid intensifying
efforts to expand fiscal spending to bolster domestic demand and the overall
economy, which has been hit by a protracted global recession.
kokobj@yna.co.kr
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