Reduce tax ratesThe National Tax Service said yesterday that an estimated 153.1 trillion won ($163.1 billion) in tax was collected last year, up 13.7 trillion won from its initial goal of 139.4 trillion won.
The amount of income tax went up 30.4 percent and the amount of corporate tax rose 19.2 percent.
The tax service explained that the amount of collected transfer income tax and real estate tax were greater than expected. The total tax collected from self-employed people went up. The use of credit cards also increased.
Thus, it is very likely that the tax service will exceed its goal for two years in a row.
It is laudable that the tax agency did its job well. The agency said it succeeded in expanding the tax system by encouraging taxpayers to use credit cards and receive a receipt for cash payments. It also said it found hidden sources of taxation through tax audits.
Therefore, isn’t it natural for the agency to reduce tax for other sectors? Is it proper for the agency to celebrate its success while people complain about the administration squeezing tax money from them?
Now it is the time to seriously consider cutting the tax rate as the agency has exceeded its goals for two consecutive years. The government has long held the policy of “broader sources of taxation and lower tax rates.”
Because the sources of taxation have expanded, the agency needs to provide a policy to cut the tax rate. President-elect Lee Myung-bak and the Grand National Party also promised to cut the tax rate during the presidential campaign.
It is evident that office workers who have been disadvantaged by heavy earned income taxes will demand the tax cut. It is also urgent to reduce real estate tax and transfer tax rates.
There is a priority to cut tax rates. Above all, the government should issue no more national bonds to resolve temporary imbalances between government revenues and expenditures. It is also necessary to cut tax rates on oil consumption, considering the international oil price hike. To boost companies’ investment, corporate tax should be reduced as well.
The government should find a suitable way for our country’s economy to reduce tax rates by comparing them with other countries.
Cutting taxes is an important way of managing the country’s economic condition. We hope the tax cuts will help revive our economy. We should not waste this rare opportunity.