Saenuri hopes to extend top income tax bracket

The Saenuri Party is pushing to reform income tax rates, its deputy chief policy maker Na Seong-lin told the press yesterday as the National Assembly conducts its inspection of the Ministry of Strategy and Finance.

The ruling party aims to lower the threshold for the top income tax rate of 38 percent for those who rake in 200 million won ($180,000).

At present, those who earn between 200 million won and 300 million won only pay 35 percent.

The current law mandates that people who earn less than 12 million won a year pay 6 percent of their annual income in taxes. Those who earn between 12 million and 46 million won are required to pay 15 percent, while those up to 88 million won should pay 24 percent, and high-income earners should pay 35 percent, or 38 percent if over 300 million won.

“The current rates were set in 1996, and they have not been changed for the last 15 years,” Na said. “The last bracket was added by the ruling and opposition parties last year.”

In August, the finance ministry carried out its last tax reform but did not make any changes to the income tax rates, saying that any big change before a new government is installed could trigger confusion and affect the result of the presidential election in December.

According to the Saenuri party’s plan, about 124.5 billion won would be added to the government’s tax revenue if the revision is approved.

Na said the reform will be discussed at a subcommittee on taxation under the National Assembly’s committee on strategy and finance.

The national inspection of the finance ministry took place for the second day yesterday. Finance Minister Bahk Jae-wan was bombarded with questions from opposition lawmakers about allegations that the government’s tax and finance policies favored chaebol at the expense of the working class.

By Song Su-hyun, Yonhap [ssh@joongang.co.kr]