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South Korea’s Finance Minister, Bahk Jae-wan, has confirmed his support for the government’s long-standing plan to reduce corporate taxes from next year.
As was agreed in December 2009, when the tax cuts were delayed for a further two years, the government is expected, from 2012, to lower the rate of corporate tax on businesses with a taxable income greater than KRW200m (USD185,000) from the current 22% to 20%.
In written statements to a parliamentary confirmation hearing when he was the nominee for the post of Finance Minister earlier this year, Bahk Jae-wan said that he supports the government’s planned cuts in corporate taxes to reduce tax burdens on the private sector. He supported lower taxes, both on comparative international grounds and to promote growth, investment and jobs in the economy.
Although the policy is being contested by opposition parties and by some within the ruling Grand National Party, he has now reiterated at a recent forum that the South Korean government will continue to advocate that the corporate tax reduction should proceed as promised.
He said that, while tax burdens have already been cut for South Korean small- and medium-sized businesses, its larger companies are still facing higher corporate taxes than in some other major economies, and that international pressure is now for a reduction in direct income taxes and a rise in sales taxes.
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