Nightmarish tax refunds
The settlement of year-end taxes for 2014 has become a nightmare instead of a bonanza. First of all, preparing the documents takes more than double the work and time compared to last year. The categories have increased and calculation has become more complicated. Tax deductions for credit card use are different according to whether debit card statements or cash receipts are supplied as well as where the money was spent.
Taxes have also increased sharply. The government had assured that taxes for workers with an annual salary of less than 55 million won ($50,551) won’t increase. But because deductions in large or single family households were reduced or became more complicated, workers earning less than 55 million won a year also have little to receive in tax refunds.
And complaints among those earning more than 55 million won are bigger as their tax burdens have increased under new laws. They are people in their 40s and 50s who are sensitive to extra taxes because their lives are already tough, with children to educate and marry off.
These complications were foreseeable when tax codes were revised in 2012. Under the revised regulations in simplified tax tables, after 2013 people pay less in taxes monthly and get fewer refunds at the year-end. Because of changes in deductions, levies are differentiated according to income sections. Despite these complications, the tax office and government had not warned people or informed them of the changes. Complaints and confusion became bigger because people had not been fully aware.
Nobody can be happy if they are asked to pay more taxes even after they dutifully paid up every month. Although the refunds are small and null, the paperwork has become much more troublesome. The simplified tax table should first be made more meticulous so that there is little gap between the figures in withheld tax and year-end settlements. The progressive tax section also should be tightened so that people on the borderline are relieved of a sharp spike in their taxes.
JoongAng Ilbo, Jan. 20, Page 30