Go to contents

Squeezing the Salaried Workers

Posted October. 13, 2004 23:05,   


Amidst the economic recession with insufficient tax revenues, workers are reportedly shouldering the increasing taxpaying burdens.

Some point out that salaried workers, whose incomes are filed transparently and thus are taxed easily, are becoming the scapegoat for filling the gap in tax revenues.

According to the parliamentary audit data submitted by the Ministry of Finance and Economy to Choi Kyung-hwan, a lawmaker of the Grand National Party, on October 13, the payroll tax during the first half of this year stands at 4.073 trillion won, a 11.9 percent increase from the same period of last year’s 3.581 trillion won.

However, the total national tax during the same period amounted to 56.8256 trillion won, a 0.2 percent drop from that of the first half of last year’s 56.9169 trillion won.

As a result, the proportion of payroll tax in the national tax rose by 0.8 percent to 7.1 percent from 6.3 percent of the first half of last year.

This indicates that amid the economic downturn, corporate tax, special excise tax, and securities transaction tax are not being collected successfully whereas payroll tax is well levied at the source of every individual’s income.

The government estimates the revenue of payroll tax for the second half of this year at 5.6231 trillion won, which is a 17.5 percent increase compared to the same period of last year.

Lawmaker Choi pointed out, “The government has set aside a 15.6 percent-higher payroll tax for next year than this year in order to collect a considerable amount of tax from the ‘vulnerable’ workers.”

In response, an official of the Ministry of Finance and Economy said, “Payroll tax is part of the withholding taxation, which leaves no room for the government’s discretion,” and added, “Given the actual amount of payroll tax this year, it is hard to say that the payroll tax earmarked in next year’s tax revenue budget is excessively high.”

Yong Park parky@donga.com