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Gov't to offset any tax gains for low income earners

By KH디지털2

Published : April 7, 2015 - 10:52

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The government will move to offset any gains in the tax burden for people making less then 55 million won ($50,750) per annum, following the uproar surrounding last year's tax refund controversy, a senior official said Tuesday.
  

Moon Chang-yong, the head of the finance ministry's tax office, said supplementary measures ironed out by policymakers are focused on resolving problems found in last year's tax settlement that inadvertently affected some people who did not expect to pay more taxes.
  

Under the 2013 tax code revision bill that was first applied to last year's tax refund, the government predicted that the tax burden for high income earners will go up, but those making less than 55 million will stay pat or fall. There were some 13.61 million people that made less than the key amount last year. The government added that on average these people paid 30,000 won less as a result of the tax code change.
  

Despite such claims, civic groups and the media reports argued there were many people slapped with more taxes.
  

The official said that the follow-up changes, which will be applied retroactively once lawmakers pass the related bill, will cut the tax burden for 5.41 million people by 422.7 billion won, or roughly 80,000 won per person. The ruling Saenuri Party said it plans to pass the bill this month, which will allow refund payments to be made in May.
  

"The move will put to right any unplanned gains in taxes," he said.
  

Moon said 2.02 million people, or 98.5 percent of those whose tax burden did rise despite earning less than 55 million won, will be given refunds that will nullify any gains, while the remaining 27,000 will pay only marginally more.
  

Despite early condemnation, a detailed analysis of all 16.19 million people who were subject to tax refunds, showed the government's initial assessment was mostly on the mark, according to the ministry.
  

Related to the findings, Finance Minister Choi Kyung-hwan told lawmakers earlier in the day that of those making less than 55 million won, 85 percent were not subject to any tax increases, with most of the gains only happening among people making more.
  

"Most people who paid more taxes were those living alone, families with three or more kids or households that had newborns last year," Choi said.
  

The finance ministry said some people paid more because the tax refunds given to one-person households and families with many children were cut. It said this oversight occurred because when the tax code was being written, officials based their assessment on average households and did not check special cases closely. (Yonhap)