The government and the ruling party agreed Wednesday to revise the tax code amid strong public backlash over revelations that some low- and middle-income earners would have to pay additional taxes this year.
In a hastily arranged meeting, the government and the Saenuri Party agreed to restore and expand certain tax credit categories to make up for the overall increase in the tax burden of some salaried workers, the ruling party’s chief policymaker, Ju Ho-young, said in a press briefing.
The move comes after the government introduced a revised tax settlement scheme under which taxpayers would pay less taxes throughout the year and receive less in rebates at the start of a new year. The revision, however, left some people with an annual income of less than 55 million won ($50,733) having to pay additional taxes.
Under Wednesday’s agreement, the government will raise tax credits for families with children and restore tax credits for new births and adoptions, Ju said.
Unmarried salaried workers who do not qualify for tax credits received by families will receive separate tax credits, while tax deductions for post-retirement savings will be expanded, he said.
The exact amount of tax credits will be determined by the end of March following an analysis of this year’s tax returns.
Any additional taxes that need to be paid under the new tax settlement scheme will be payable in installments.
The ruling party and the main opposition New Politics Alliance for Democracy will discuss ways to revise the tax code to reflect the proposed changes and handle the relevant bill during April’s parliamentary session, Ju said.
The parties will also jointly push for legislation to enable the retroactive payment of the tax credits, he said.
During the meeting, Finance Minister Choi Kyoung-hwan apologized for causing “an inconvenience and burden” to the public. (Yonhap)
