The ratio of South Korean workers exempt from paying earned income taxes reached 48.1 percent in 2014, higher than numbers found in other advanced economies, a local report said Sunday.

According to the July edition of the Finance Forum released by the Korea Institute of Public Finance (KIPF), the percentage of Korean workers who did not pay taxes on their income has been falling from 47.6 percent in 2006 to 32.4 percent in 2013, but jumped sharply the following year. 


The sharp increase in 2014 follows the revision of the country’s income tax rules that aimed to allow people to pay fewer taxes throughout the year in exchange for accepting smaller refunds at the year‘s end.

In 2014, the ratio of workers who did not pay income taxes jumped to 17.8 percent, or 235,144, of the workers who earn 40 million won-50 million won ($36,000-45,000) a year. It was up sharply from just 1.5 percent, or 18,475, of the workers in the same wage category in 2013, the report said.

Among those who earn more than 100 million won a year, 0.27 percent, or 1,441, were exempt from paying income taxes in 2014, jumping from a mere 0.01 percent, or 53, a year earlier, it said.

South Korea, meanwhile, beat developed countries in terms of the percentage of workers who did not pay income taxes. Its 48.1 percent ratio is much higher than the 25.1 percent reached in Australia and 2.9 percent in Britain, KIPF researcher Kim Jae-jin said in the report.

“The government needs to come up with measures to mend the tax laws, given the high number of workers in the country who are not paying taxes on earned income,” Kim said. (Yonhap)