Global Income Tax to Be Effective from 2001

The global financial income tax, by which tax is calculated by combining the total income of both spouses, will be re-introduced in 2001. As a consequence, the government will levy the tax in May 2002 on financial income earned in 2001.
The interest income tax will be reduced to 20 percent next year from the current 22 percent, and will be lowered to 15 percent by 2001. The special excise tax on some electronics goods and sports centers, such as public golf courses, will be abolished.
The government's income from inheritance tax will increase as the amount of money that qualifies for the highest tax rate will be lowered to 3 billion won from the current 5 billion won.
The government and ruling coalition, on August 16, agreed on the tax reform policy to follow up President Kim Dae-jung's Liberation Day address, which emphasized tax reforms.
According to the agreement, the global financial income tax will be imposed on the families whose annual financial income exceeds 40 million won.
The special excise tax on TVs, refrigerators, soft-drinks, sugar, pianos, cosmetics, ski slopes and bowling alleys will be abolished, while the tax on jewelry, air conditioners, cars, gasoline and regular golf courses will remain in place.
A top inheritance tax rate of 50 percent will be levied on amounts exceeding 3 billion won, while the current tax system imposes 45 percent on inheritances exceeding 5 billion won. Furthermore, the valid period for imposition of inheritance tax will be extended to the life of the inheritor from the current 15 years.
Kang Joo-an : jooan@joongang.co.kr