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Salary increase falling far short of withholding tax

South Korean workers' average wage rose less than 30 percent in the 2008-2015 period, while the amount of their withholding tax jumped 60 percent, tax records showed Monday.

Statistics provided by the National Tax Service to Rep. Park Myung-jae for the ongoing parliamentary inspections said an average salaried worker earned 32.6 million won ($28,913) a year in 2015, up 28.9 percent from 2008. The withholding tax, on the other hand, rose 60 percent to 1.6 million won from 1 million won during the same period.

(Yonhap)
(Yonhap)

Records showed that for the self-employed, the gap had not changed much. Their earnings averaged 29.6 million won in 2015, up 24.9 percent from 2008. Their withholding tax increased 30.3 percent to 4.3 million won.

While the statistics indicate that salaried workers pay less taxes while earning more than the self-employed, the pace of the increase in retention tax leaves room for controversy and could lead to strong resistance when the government tries to raise tax rates, according to experts.

"Earned income by salaried workers is transparent. Income earned by others is not," Rep. Park said. "This means that only workers with earned income have to deal with a rise in taxes." (Yonhap)
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