By Yi Whan-woo
Salaried workers are crying foul over the government’s tax policy, which they complain is increasingly relying on income tax collected from them, reducing them to a mere source of tax revenue after hardly receiving tax benefits.
The complaints come as the policy was mainly intended to be business-friendly, offering a reduced corporate tax rate of 24 percent, down from last year’s 25 percent and one percent off the previous tax rates for all other tax brackets.
The eased tax rate for businesses was driven by the hope that it would help firms make more profit and subsequently pay more taxes under President Yoon Suk Yeol’s private sector-driven economic vision.
The amount of corporate tax revenue, however, decreased by 23.2 trillion won ($17.4 billion) in 2023 from a year earlier, compared to earned income tax revenue from salaried workers that increased by 1.7 trillion won over the cited period, according to the Ministry of Economy and Finance last week.
The 2023 earned income tax revenue totaled 59.1 trillion won, accounting for 17.2 percent of Korea’s entire tax revenue of 344.1 trillion won for the same year.
In particular, the ratio of earned income tax revenue was the highest in 10 years. It stood at 10.9 percent in 2013 and climbed to 12.4 percent in 2015, 12.8 percent in 2017, 13.1 percent in 2019 and 13.7 percent in 2021.
Compared to 2013, the total amount of earned income tax revenue for 2023 marked an increase of 168.8 percent, far steeper than 70.4 percent for the country’s entire tax revenue.
“I feel pathetic for the government considering its dependence on salaried workers to generate tax revenue, after paying little attention to us and instead favoring big firms and rich people,” said Jeong Woo-taek, a mid-level manager at a medium-sized enterprise.
The government’s tax policy drew more criticism as it still adheres to the eased tax policy in the wake of last year’s record tax revenue shortfall.
The amount of tax collected was 344.1 trillion won, which was 56.4 trillion won less than the forecast made in the finance ministry’s 2023 budget plan.
“The government must be thinking of us as sitting ducks when it comes to tax revenue, given that it has no plan to overhaul its business-friendly tax policy and therefore another shortage in taxable income is likely to happen in 2024,” an internet user wrote.
Speaking on condition of anonymity, a tax accountant suggested the government “pursue a fair and objective tax policy for different groups of taxpayers.”
Read More: Salaried employees say Yoon’s tax policy isn’t worker-friendly