The government will be able to collect about 16 trillion won ($14.3 billion) in additional tax revenues for the coming five years if the tax rate hike for the superrich and top conglomerates advocated by the ruling party are implemented, a parliamentary report said Thursday.
Rep. Choo Mi-ae, leader of the ruling Democratic party, has proposed raising tax rates for the super-rich and top-earning conglomerates to help finance the Moon Jae-in administration's welfare and job creation agenda estimated to cost 178 trillion won over the next five years.
Choo said her party will seek to raise the income tax rate for individuals earning between 300 million won ($267,737) and 500 million annually to 40 percent from the current 38 percent.
She also said the ruling party will consider raising the corporate tax rate for firms with annual net profits exceeding 200 billion won to 25 percent from the current 22 percent, and the rate for individuals earning more than 500 million won to 42 percent from the current 40 percent.
Under the proposed tax rate hikes, the government will collect 4.8 trillion won in additional income tax revenues and 10.8 trillion won in extra corporate tax revenues between 2018 and 2022, according to the report by the National Assembly Budget Office.
The figures translate into 968.1 billion won in additional income tax and 2.17 trillion won in extra corporate tax earnings on an annual basis.
The numbers are a bit lower than the government projections of 1.08 trillion won in extra income tax revenue and 2.7 trillion won in additional corporate tax revenue annually.
South Korea's national tax-to-GDP ratio is expected to rise to an all-time high 19.7 percent next year from 19.4 percent last year. The previous record was 19.6 percent in 2007. (Yonhap)