SEUOL: The Chairman of South Korea’s ruling Saenuri party, Kim Moo-sung, has warned the Government that it needs to make a choice between higher taxes to fund its welfare reforms.
This runs contrary to the GoverAnment’s present policies, as President Park Geun-hye, when elected in 2012, had promised to increase welfare spending without raising taxes. Since then, the Government has maintained stimulus measures in the face of a sluggish economic recovery, including pledging not to increase personal and corporate income tax rates for the foreseeable future.
However, the Government has recently had to agree immediate changes to the personal income tax code, as a reaction to the outcry over the reduced refunds that followed modifications made in the 2014 Budget. The Government re-confirmed that there had been no intention to collect more taxes from those on middle and lower incomes.Kim pointed out in a parliamentary speech that it would be impossible to expand welfare services, as originally planned by President Park, without increasing taxes, and that South Koreans would have to agree to bear that increased burden before such a policy could be implemented.
