Estate Transfers May Draw New Taxes This Year

The plan to move to all-inclusive taxation of inheritance and gift transfers may come sooner than the government has indicated － perhaps as early as September, an official at the Ministry of Finance and Economy said Sunday.

The government said May 28 that the all-inclusive taxation on transfers as well as on income is in its long-term plan for tax reform, to be implemented over the next five years.

"The Millennium Democratic Party wants it introduced sooner," said the finance ministry official. "The primary objective of the new system will be to block the transfer of wealth that escapes taxation."

The system will assume that all transfers are taxable unless specifically exempted by a provision in the tax law.

"We are reviewing how the system is functioning in other countries," the official said, "and we will also have to consider whether it contradicts the constitutional philosophy of taxation by law and how to reconcile it if it does."

The joint committee on tax reform, which reviewed and passed tax changes last week, will meet in August and will be asked to implement the inclusive plan the next month, the official said.

by Lee Sang-ryeul