The government announced Tuesday a middle and long-term tax reform plan. The plan would call for a more balanced tax burden between income groups, bringing the tax system up to international standards and expanding Korea’s social safety net. So far, the direction looks good. The question is how faithfully the plan is implemented. In the past, the government has said it would push similar tax reform plans, but they never lived up to expectations. This time around, the government must properly prepare and actualize its tax reform plan.
President Roh Moo-hyun is stressing growth for all classes and the attainment of a developed economy. There is much to do to achieve this goal, which could be called the task of our age, but one mustn’t put off support for the society’s weak or the expansion of social welfare. It goes without saying that without the support of the tax system and tax administration, this would be very difficult.
In particular, the most important thing is the implementation of a balanced tax system. We think it’s fairly significant that the government said it would consider reducing tax exemptions, the introduction of an inclusive income tax system, and an earned income tax system. But it’s a fact that considering how previous promises to reduce tax exemptions have failed, one must question how strongly this plan will be implemented. Moreover, the government must aggressively implement another plan that will assist in improving the distribution structure.
That the rates of corporate and income taxation will be kept at levels that aren't disadvantageous compared to major competitors may be the source of controversy. This is because while the goal of bringing the tax system up to international standards to increase Korea’s competitiveness may be understandable, that itself could deal a blow to balanced taxation. Lowering taxes isn’t everything. If we are to become a developed society, it will inevitably necessitate a lot of costs, especially when one considers things such as Korea’s rapidly aging society. One mustn’t be afraid of the government collecting as much in taxes as it needs. We look forward to this thought sinking in to the government’s long-term tax reform plan.
The Hankyoreh, 23 March 2005.
[Translations by Seoul Selection (MRT)]
[Editorial] This Time, Properly Carry Out Tax System Reform |
