Credit card tax deduction doubles

From 2001, the government decided to enlarge the double income deduction by credit card. In addition, the government alleviated the criteria for judging non-business real estate, and according to the newly introduced provisional investment tax deduction system, deduction period will be advanced seven months earlier than actual tax payment period.

Minister of Finance and Economy Jin Nyum reported this Jan. 15 in the New Year¡¯s Ministry of Finance and Economy (MOFE) plan to President Kim Dae-Jung at the presidential mansion.

¡°In order to activate the use of credit cards and alleviate the salaried men¡¯s tax burdens, when salaried men use credit card more than 10 percent of their annual salary, they will benefit from the enlarged income deduction by 10 percent of the exceeding portion,¡± Minister Jin explained.

In this respect, Kim Jin-Pyo, chief of Tax System Office of MOFE, added, ¡°From January 2001, credit card users will be able to deduct 20 percent from his income larger than existing 10 percent deduction.¡±

For example, in the case a salaried man¡¯s annual pay amounts to 30 million won and he has used 10 million won by credit card, his income deduction will be enlarged from the present 700,000 won to 1.4 million won, so the effective tax exemption will reach 100,000 won.

Kwon Soon-Hwal shkwon@donga.com