S. Korea to impose 45% tax on highest incomes

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Published Jul 22, 2020

[2020세법개정] 홍남기 "저소득층 특히 어려워…고심끝 고소득자 세금인상"

To pay for its ambitious plans for the economy, the South Korean government has announced a bill that'll raise taxes on the country's highest income earners.
The bill includes measures to bring down soaring home prices in the capital area by discouraging speculation.
Kim Dami has the details.
Higher taxes for the ultra rich.
That's the crux of South Korea's latest revision to the tax rules published on Wednesday... with the goal of strengthening social solidarity and income distribution.
"As all of our citizens can feel, small business owners and SMEs as well as those on lower incomes are struggling due to the COVID-19 pandemic. The government has decided to raise taxes on those who are capable of paying more and have taken less of a blow from the pandemic than others."
That means people who earn more than one billion Korean won a year, which is around 835-thousand U.S. dollars, will have to pay 45 percent of it in tax.
So, someone who just crosses that threshold... will owe taxes worth around 375-thousand dollars.
The government noted that this new rate will apply to around point-zero-five percent of the country's population.
That'll bring in revenues of about 754 million dollars.
Globally, a tax rate of 45 percent is not uncommon it exists in Japan, France, Germany, the UK and many others.
Also in the bill announced on Wendesday it's going to be a lot more difficult for speculators to make money buying and selling homes.
If a home is sold within one year of purchase, the gain will be taxed at 70 percent up from the current 40 percent.
Gains made within two years of purchase will be taxed at 60 percent.
The government is also jacking up property taxes on people who own multiple homes.
It's going up from 3-point-2 percent of a home's value... to six percent.
If passed by the National Assembly, these tax rules will apply next year.
The government said it's going to send the bill to the Assembly by September.
Kim Dami, Arirang News.

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S. Korea to impose 45% tax on highest incomes

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