[Focus] What`s changing in new year? (1)

What`s changing in new year? (1) What`s changing in new year? (2)

¡å Taxation

Consolidated taxation on income from financial transactions: tax will be levied on the combined income of the husband and wife from financial transactions that exceed 40 million won a year. Aggregate tax will be imposed on the exceeded amount. The withholding tax rate on the interest following the application of consolidated taxation on financial earnings and income from dividends will be lowered to 15 percent.

Deduction on income: 50 percent of amounts paid up for the national pension and pension funds of public servants, soldiers and private school teachers will be exempted from taxation in 2001 and 100 percent from 2002. Individual pension subscribers will benefit from a 100 percent deduction within the limit of 2.4 million a year from next year.

Expansion of boundary for income tax deduction on donations: The limit for income tax deduction on donations will be expanded. Donations to social welfare facilities will be fully deductible, up from the present 5 percent, those to religious facilities will rise to 10 percent from five percent and those to private schools will rise to 100 percent from 10 percent.

¡å Financing, foreign currency

Implementation of system for partial guarantee of deposits: Up to 50 million won of the total deposits of customers, including interest, will be guaranteed beginning next year in the event their banks go bankrupt. Therefore, the customers may not receive the deposited money from the Korea Deposit Insurance Corporation, in the event they choose their banks wrongly.

Abolition of limit for remittance of donations in dollars: With the implementation of the second-phase free foreign exchange dealings from next year, the limit for the remittance of donations in dollars will be scrapped. But donations of more than $10,000 a year should be reported to the National Tax Service and the Korean Customs Service, and donations of more than $50,000 should be approved in advance by the Bank of Korea.

Limit on overseas tourists' expenses to be scrapped: The ceiling will be lifted, but expenditures of more than $10,000 should be reported to customs authorities. Leaving the nation with $50,000 or more should be reported to the Bank of Korea. Reported amounts are notified to the National Tax Service.

Abolition of expenses for overseas stay and study: More than $100,000 per case should be approved in advance by the Bank of Korea. Expenses exceeding $100,000 a year are notified to the National Tax Service. The limit for expenses for emigration abroad will be abolished. However, the tax office will confirm the sources of expenses exceeding $100,000.

¡å Consumer protection

Separation of prices and taxes in receipts: Store keepers at department stores or large retail shops have to clarify the prices of goods and value added taxes separately in receipts from next year.

Recommendation for recall: In the event the use of sold goods is judged to pose the risk of inflicting damage on the body or assets of consumers, chiefs of central administrative agencies may recommend the sellers to recall voluntarily before handing down an order for recall.

¡å Information communication

Reinforcing the protection of information on individuals: Duties concerning the protection of information on individuals are provided beginning in July to information communication service providers, department stores, tourism agencies and airlines that collect, use and offer information on individuals. Those who use information on individuals for other than the specified purposes will face up to five years in jail instead of the present one-year maximum.

Punishment of cyber terrorism to be strengthened: Punishment of cyber terrorism such as libel, circulation of obscene materials, stalking, hacking or spreading computer viruses will be drastically reinforced beginning in July.

Implementation of call display service: In order to prevent obscene telephone calls, a service to show the telephone number of the caller on the receiver's telephone will be implemented. But the right to transmit the number is guaranteed in order to protect the caller's privacy.

Start of digital TV broadcasting: Digital TV broadcasts will start in the second half of the year. Digital TV broadcasts can be viewed on digital TV sets or on analog TV sets installed with set top box.

Start of Mini FM broadcasts: A mini-FM radio broadcaster will start to provide information at stadiums, tourist's destinations or exhibitions from October.

¡å Transportation

Ban of mobile phone use while driving: Beginning Jun. 30, drivers who use mobile phones at the wheel will face a fine of 70,000 won and lose 15 traffic points. But the use of phones in emergency vehicles, to report crimes or disasters, and ``hands free'' devices will be allowed.

Increase in compensation money for traffic accidents covered by compulsory insurance: In the event of death, compensation money will be raised to 20-80 million won from the present 15-60 million won. For the injured, it will go up to 600,000-15 million won. And for those who suffer handicaps, the amount will increase to 5-80 million won.

Automobile tax on used cars to be reduced: Automobile taxes on non-business cars will be reduced by 5 percent every year from the third year after they are registered. A uniform 50 percent reduction will be available for 12 year-old or older cars.

Restrictions on operation of free shuttle buses : Beginning in July, the operation of free shuttle buses by department stores or big discount stores aimed at attracting customers will be totally banned. But the operation of such vehicles by private teaching institutes, hospitals and hotels will continue to be allowed.

Penalty on unpaid tolls: Those who fail to pay tolls will have to pay a penalty of up to ten times the toll charge (currently two times) from July.