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South Korea's New President Has No Plans For Tax Increases

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

24 December 2012


Park Geun-hye, daughter of the country’s previous military ruler Park Chung-hee, and elected to take over as South Korea’s first female President in February next year, has no professed policy to increase taxes, despite the need to fund a wide-ranging welfare program.

All lawmakers seem to be aware of the need for South Korea to increase its welfare spending as a percentage of gross domestic product, and close the widening income gap. Park herself has pledged to cut college tuition fees, expand the government’s child-care provisions and provide additional public healthcare.

Park’s ruling Saenuri Party has indicated that funding for her program can be found by closing tax loopholes and cutting government spending. No tax increases were mentioned during Park’s campaign, although many commentators are concerned that widening the tax base by closing unnecessary tax breaks will prove insufficient to provide enough resources.

The Saenuri Party has an historical pro-business leaning and Park seems to have no intention of attacking the complex family share structures of the huge "chaebol" businesses, such as Samsung and Hyundai. She could, instead, insist that current laws and business taxes should be strictly respected.

TAGS: compliance | tax | business | tax compliance | public health | corporation tax | education | Korea, South | tax breaks

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