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Annual Income Tax Deduction Of Up To One Million Won For Low-Income Bracket

Annual Income Tax Deduction Of Up To One Million Won For Low-Income Bracket

Posted November. 21, 2003 22:56,   


Starting next year, funeral ceremony and removal expenses will be income tax-deductable, with a maximum limit of one million won for people in the low-income bracket earning under 25 million won a year. Furthermore, the value-added tax on sanitary napkins will be exempted, which is expected to cause consumer prices to drop.

The Finance and Economy Committee drew up the nine revised tax law bills, including the income tax law and special case limited taxation law, and passed them on to the Legislative and Judiciary Committee on November 21.

Tax revenues are projected to decrease an estimated three trillion won over three years due to the extension of tax exemptions and various additional income tax deductions. In the revised bills, the Finance and Economy Committee decided to retain the deduction of medical expenses amounting to 3 percent or more of total annual salary, with the deduction being unlimited for individuals and limited to five million won per family.

In addition, the special tax exemptions for small- and medium-sized businesses which was slated to be abolished was extended by the bill for two more years, with the exemption rate cut in half from 30 percent to 15 percent for local small- and medium-sized businesses, from 20 percent to 10 percent for metropolitan small businesses, and from 10 percent to 5 percent for wholesalers and retailers.

The time limit for the exemption of the value-added tax for general management expenses of apartments exceeding the national housing scale, with an area of exclusive use above 25.7 pyong, was prolonged by one year to extend to the end of next year.

In addition, the government bill, which levies a sales tax on paintings and written works costing 20 million won or more, was adjusted to apply only when involving the sale of work by artists who are deceased.

Kwang-Hyun Kim kkh@donga.com