Study challenges gov’t income tax calculationsEmployees might have to pay more in income taxes next year than what the Ministry of Strategy and Finance estimated based on its revised tax law, according to a study by a non-governmental organization (NGO) yesterday.
“Last year when the government announced changes in its tax law, it noted there would hardly be any increase for wage earners,” the Korea Tax Internet, the NGO that conducted the study, said in a release.
“But our independent study showed that the ministry’s estimate would apply to only about 18 percent of wage earners.”
The Korea Tax Internet analyzed data of 10,682 taxpayers who are members of the organization and ran simulations using the tax law that was revised last year.
The analysis showed people with annual salaries of 55 million won ($53,425) or less who did not expect their taxes to increase will have to pay more.
Also, those earning 60 million won to 70 million won of annual salary will be faced with paying a bill 2.6 times more in income taxes than what the government predicted based on its tax revision.
“The tax increase for middle- and high-income earners was different from the government’s estimate,” the statement said. “This is expected to create some controversy, as it shows there is a serious hole in how the government comes up with an estimate of income tax.”
According to the Korea Tax Internet, workers with an annual salary of 30 million won to 40 million won would have to pay 56,642 won more in taxes, which translates to a total of 89.3 billion won.
The government announced last year that based on its change in tax law, workers in that salary range would face no increase.
“The government’s estimate is based on the calculation of just one random wage earner belonging to one of the 16 different income level groups without considering other elements such as the number of dependent family members,” said the organization. “This is what creates a huge gap with what workers would have to pay in reality.”
BY LEE EUN-JOO [email@example.com]