Parties Agreed 1 Percent Lowering of Corporation Tax

The National Assembly finished 2001 session with passing 22 bills at a plenary session on 21st. The bills are such as the national budget bill for 2002, total of 111 trillion and 979 billion won (general account), the revised special bill on the development of Jeju Island, and the revised standard bill on fund management, etc.

Although the ruling and opposition parties disputed with each other on the revised bill of corporation tax that planed to lower the tax by 2 percent, the Grand National Party (GNP) accepted the request of the New Millennium Democratic Party (NMDP) that wanted to reduce the tax cut by 1 percent, and they submitted a common bill and approved it.

Due to the revision of the corporation tax bill, the reduction of the corporations` tax incidence is expected to amount 150 billion won in 2002, and 750 billion won from 2003.

The approved budget bill trimmed 600.8 billion won from the government original proposal of 112. 58 trillion won by cutting 1 trillion and 971.1 billion won and increasing 1 trillion and 370.3 billion won. The increase rate for 2002 budget compare to that of 2001 marked 11.7 percent, which is 0.6 percent lower than the original government proposal of 12.3 percent.

The approved special account budget for 2002, including governmental financing, is 68 trillion and 242.5 billion won, trimming 151.6 billion won from the government original proposal of 68 trillion and 394.1 billion won. The total curtailment for 2002 budget, general and special account, amounts to 752.4 billion won.

The budget of the National Intelligence Service (NIS) reduced 8 billion won, and it was the first time to curtail the budget of the NIS since the launching of the Intelligence Committee in 1994. However, the budget for the social overhead capital investment increased 1.3 trillion won, including 121.5 billion won of the unit price increase under the direct payment system of rice cultivation, 47.3 billion won of the allowance increase for the kindergarten and elementary school teachers, 75 billion won of the second phase business for the express train between Seoul-Pusan, and 17.3 billion won for the outer road construction of Incheon International Airport.

The National Assembly also passed the extension bill on the operation period of the special committee on political reform by Feb. 2002. However, the representatives of the United Liberal Democrats (ULD) protested against the extension bill and tried to occupy the platform because of the exclusion of the ULD from the political reform committee.

Jong-Koo Yoon swpark@donga.com