Reps draft bill to tax all Koreans for reunification

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Reps draft bill to tax all Koreans for reunification

The government’s plan for a unification tax on citizens took a step forward on the first day of 2011 after twelve lawmakers from ruling and opposition parties offered a bill with details on the tax and its uses.

“There have been many abstract discussions on unification, but a severe lack of actual preparations has existed,” said Rep. Kim Choong-hwan from the ruling Grand National Party, who led the group of lawmakers.

“As difficult as it would be right now to handle the cost of possible unification with taxes presently being collected,” Kim said, “the bill was proposed to induce South Korean citizens to participate in preparing for unification and to make provisions for financial resources.”

The lawmakers, including Kim and seven others from the ruling Grand National Party, Kim Sung-gon from the main opposition Democratic Party, Lee Jin-sam and Kim Yong-gu from the Liberty Forward Party and independent representative Rhee In-je, proposed that all individuals and corporations responsible for paying income, corporate, succession or donation taxes would be subject to the unification tax.

The bill would impose a new two percent tax on income, a 0.5 percent tax for corporate taxes, and five percent each from succession and donation taxes.

Setting up a special organization to collect and organize the funds from the unification tax is also an option in the bill, and the bill proposes using one percent of a year’s collection of all Korean taxes to establish the body.

The bill states that the money will be used to improve the lives of North Korean citizens, improve infrastructure in North Korea, recover a sense of community, stabilize the North and develop the North Korean region.

Plans for a unification fund started last August after President Lee Myung-bak stated in a nationwide address that “it is time to prepare realistic methods like a unification tax,” in case of unification with the North, which he indicated wasn’t so far away.

Saturday’s motion wasn’t the first bill on the issue at the National Assembly. Rep. Chung Ui-hwa from the Grand National Party proposed an amendment last September to the Inter-Korean Cooperation Fund Law that would create a new “unification account.”

By Christine Kim []
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