Uri Party Set to Allow Seoul City Government to Collect Property Tax En Bloc

The Uri Party plans to bundle county property tax and district government tax into national tax and turn Seoul’s property tax into Seoul City tax so that the Seoul City government can levy it and distribute property-tax revenue to its districts.

The plans elicited criticism from the Grand National Party and the Seoul City Government, which said, “While the Uri Party said it would strengthen the local government autonomy, it tries to create a revolutionary situation by depriving local governments of the authority to collect local tax.” The controversy is likely to spread.

“We plan to change the name of property tax currently collected by district government in Seoul to Seoul City Tax so that the city government can collect en bloc,” Rep. Chung Se-kyun, who heads the Uri Party’s policy coordination commission, said. “We will pass the amendment when the 17th National Assembly convenes.”

Earlier, the Uri Party said it would decrease the limit in property tax that the central government allows for local government to 30 percent from 50 percent as the Gangnam district council attempted to set the decrease rate of local tax at 50 percent.

“As we see in the Gangnam council, resistance to the central government real estate policy may ripple out and compound the difficulty in policy implementation,” Rep. Chung said, while emphasizing the need to limit the local government’s authority to collect property tax.

“If the Seoul city government collects property tax and divides it for the districts,” Rep. Chung continued, “It will decrease the benefits the Gangnam district receives, but it will fit in nicely with justice in taxation by correcting ‘the rich gets richer and the poor gets poorer situation’.”

“The property tax rate of the Gangnam district is about one tenth the average of an advanced country,” Lee Chung-woo, Presidential policy coordinator said at a conference, “If the housing issue is addressed, 50 percent of the issues related to the widening gap between rich and poor will be resolved.”

“The central government has said it would implement federalist measures to increase the financial independence of local governments,” Lee Han-goo, the GNP’s policymaker, said. “It is contradictory for the central government to strip the local government of authority to use its control over property tax to cool real estate prices.”

Young-Hae Choi Seung-Heon Lee yhchoi65@donga.com ddr@donga.com