Koreans Likely To Pay More Tax In 2002

by Mary Swire, Tax-News.com, Hong Kong

13 November 2001

An official from Korea's National Assembly (Finance and Economy Committee) has said that it is more than likely that Korean taxpayers will have to pay more tax next year.

Park Bong-soo, a senior staff director, told the Korea Herald that if the government's 5 per cent economic growth forecast isn't met next year, the national tax ratio which stood at 26.4 per cent last year will be forced to escalate - it is expected to be as high as 26.8 per cent before year-end due to declining profits and lower than expected growth.

The ratio, which determines the level of taxes, is worked-out by adding the net amount of taxes and social security outlays each year and dividing the same by income for the same period.

According to Park, the Ministry of Finance and Economy is anticipating next year's growth to be somewhere between 3-5 per cent but major institutions such as the Bank of Korea and the Korea Development Institute are predicting figures just above 3 per cent, and several private think tanks say they are expecting growth of around 2.9 per cent.

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