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Opposition deflects blame on furor over tax code

A day after the ruling Saenuri Party and the Ministry of Strategy and Finance agreed to revise controversial changes made in 2013 to the tax code and apply retroactive changes as early as May to reduce the weight on tax payers, the main opposition New Politics Alliance for Democracy (NPAD) was quick to cast blame.

NPAD Rep. Moon Hee-sang, who serves as the party’s interim chairman, stepped up an attack against the government Thursday by demanding that President Park Geun-hye issue a public apology for the unexpected tax increases and that Finance Minister Choi Kyung-hwan be held accountable for the confusion.

The National Tax Service opened its year-end tax settlement service online on Jan. 15, when many middle-class employees discovered that their usual tax refund wouldn’t be coming this year. Others are being forced to pay additional taxes beyond what was withheld from their paychecks.

Those results are the outcome of an amendment to the tax bill the National Assembly passed 245 to six at the end of 2013 that was first applied to income taxes for 2014.

Under a proposed agreement made in an emergency meeting Wednesday between the Saenuri and the Finance Ministry, the National Assembly will again amend the tax law in April to reduce the tax burden. Refunds for some tax payers will be made to their savings accounts as early as May.

The amendment to the tax bill would restore or expand tax credit categories to relieve the overall tax increase.

For instance, salary earners with one child or more will see their tax credit rates rise, which would raise the likelihood for additional refunds compared to now.

Tax credit rates on pension savings insurance, to qualify for a tax refund of 4 million won ($3,680), would also increase from 12 percent to 15 percent.

However, Chung Hee-soo, head of the National Assembly’s Strategy and Finance Committee, expressed concerns that the deal between the Blue House and the Saenuri Party to apply the revised tax law retroactively could trigger yet another conflict.

“I understand the circumstances that forced [them] to agree on the decision,” he said, “but it goes against principle and it could further complicate the dispute over equality.”

“The retroactive application of a law could tear down the foundation of constitutionalism. Once a law is legislated, we should abide by it first. Should any problem occur, it should be addressed later,” Chung continued.

He added that he would convene a standing committee in early February and conduct a question-and-answer session with Finance Minister Choi Kyung-hwan.

BY SEO JI-EUN [spring@joongang.co.kr]