[THE INVESTOR] Local businesses are expected to pay an additional 4.7 trillion won (US$4.20 billion) per year in corporate tax due to tax revisions over the past four years, a study showed on Sept. 20.

Since the incumbent administration came into office in early 2012, the government has enacted 14 separate revisions to various tax-related laws that have resulted in a significant increase in the amount paid by local firms, according to the Federation of Korean Industries.

For instance, a 2 percentage point increase in the minimum tax rate for companies in 2012 followed by another 1 percentage point hike in 2013 have led to an additional 774.5 billion won paid by local businesses in taxes, the FKI said, citing the report by Kim Woo-cheol of the University of Seoul.

Also, a brand new tax on company cars that went into effect last year is expected to force local companies to pay an additional 298 billion won in corporate tax per year.

“Some insist on the need for a corporate tax hike, but numerous revisions to laws on corporate and local taxes since the inauguration of the incumbent administration are already expected to cause an additional 4.7 trillion won in corporate tax while some of those revisions have already led to an increase in the amount paid,” the professor was quoted as saying.

(theinvestor@heraldcorp.com)