The new Moon Jae-in administration will likely revise tax codes in the second half of the year to finance its election pledges to create jobs, government officials said Monday.
On the campaign trail, President Moon promised to focus more on job creation and expanding welfare for young people. In particular, he said his government will create some 800,000 public jobs during his five-year term, grant an allowance to young jobseekers and offer public residence to newlyweds at lower rent.
Many estimated that some 178 trillion won ($158 billion) will be necessary to carry out Moon's campaign pledges in the coming five years.
President Moon has suggested a hike in corporate and income taxes, and a removal of tax exemptions and benefits to secure 31.5 trillion won over the next five years.
"Tax issues are sensitive. We are trying to handle it carefully and gradually," an official who is close to the matter said on the condition of anonymity.
The government will try to cut costs and find other ways to raise funds in the first place and push forward with a tax code revision in July and August. The government revises tax codes twice in a year.
The finance ministry said it has already examined the feasibility of Moon's tax hike plans and is now ready to revise the tax code accordingly in the second half.
But the potential tax hike will face strong backlash from the main opposition Liberty Korea Party, which holds 107 seats in the 300-member National Assembly. The ruling Democratic Party has 120 seats. (Yonhap)