Published : 2013-08-13 21:32
Updated : 2013-08-13 21:32
The number of direct debit cards issued in South Korea has topped 100 million early this year on the back of the government’s move to bolster their use for larger tax revenue, data showed Tuesday.
The figure reached 102 million at the end of March, growing rapidly from 81 million in the same month in 2011, 93 million in March 2012 and 99 million as of December 2012, according to the data by the Financial Supervisory Service.
The brisk growth in the number of debit cards came as the government has been stepping up efforts since 2011 to spur the use of the payment method as part of its bid to secure more stable tax revenue.
The latest policy to encourage the use of debit cards appeared in the revised tax law in which the finance ministry said it will keep its 30 percent tax exemption rate for debit card users, while lowering the figure for credit card users to 10 percent from the current 15 percent.
The government is also considering lifting the daily transaction limit of 3 million won ($2,683) for debit cards and offering a different ceiling depending on the user’s credit rating, the FSS said.
The government will likely further advance its approach in bolstering the use of direct debit cards, since securing more tax revenue has become one of the top priorities set forth by the Park Geun-hye administration.
Park has pledged to secure more tax revenue since she took office in February under the banner of clamping down on the underground economy.
Some experts, however, expressed doubt over whether Park’s policy will bear fruit given that credit card firms here have seen a steep fall in their profits largely due to stiffer regulatory measures.
They said it’s hard to expect card companies to invest more in debit card business when it is not as profitable as credit cards.
An official from a local card firm said, “While the industry is trying its best to be in step with the government’s policy, it doesn’t help us much at all in terms of generating profit.” (Yonhap News)