Tax Cuts during the Next Five Years Estimated at 8.6 Trillion Won

The tax cut plan in promotion by the presidential transition committee to encourage investment, which also contains corporation taxes, is expected to produce a tax reduction of 8.6000 trillion won during the coming five year period.

According to the Ministry of Finance and Economy (MOFE) and the transition team on February 12, if the three-faceted tax cut plan -- reduction of minimum tax rate, reduction of corporation tax and increase of R&D tax credits -- is approved during the regular National Assembly session this September, total 8.6020 trillion won tax is anticipated to be reduced during the five year period from 2009 to 2014.

In detail, the result of the corporation tax reduction was estimated at 8.4540 trillion won; that of the minimum tax rate reduction at 126.0 billion won; and that of the R&D tax credit increase at 22.0 billion won.

The transition committee plans to reduce the 25 percent corporation tax rate -- imposed on enterprises whose tax base exceeds 100 million won -- to 20 percent by cutting 1 percentage point every year for five years. For enterprises whose tax base is lower than or equal to 100 million won, the transition team plans to reduce the 13 percent corporation tax rate to 12 percent in 2009, 11 percent in 2011, and 10 percent in 2013.

At the regular National Assembly session this September, the transition committee also plans to raise the lower-level corporation tax threshold from 100 million to 200 million won tax base to alleviate the tax burden of small and mid-sized enterprises

[Min-jeong Lee / KHS]

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