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Give 100,000 Won, Take 110,000 Won

Posted January. 18, 2005 22:19,   


Last year, Mr. L donated assemblyman K 100,000 won. Mr. L, businessman, will receive 10,000 won more than the donation for a return tax of 110,000 won this month after year-end adjusting.

Likewise, controversy about extravagant tax credits for politician funds is brewing.

According to the Ministry of Finance and Economy and the National Tax Service on January 18, since last year, the government exempted up to 100,000 won per person for funds directed towards political parties and assemblymen, and for amounts exceeding 100,000 won, benefited a maximum of 4,900,000 won.

However, in cases of 100,000 won worth of tax credits, the resident tax (10 percent of income tax) is exempted, making the actual credit total 110,000 won.

Tax experts admonished, “Tax exemption means you get that much in tax returns,” and said, “It’s a mystery how politician funds of 100,000 won can get a 110,000 won return out of national taxes, and it can be justified.”

Sources at the Ministry of Finance and Economy expressed, “We don’t think that there are that many supporters out there who got tax exemptions of 110,000 won for donation of 100,000,” and added, “Any disadvantages discovered in the operation results will be reflected when related laws are amended at the end of the year.”

Jae-Seong Hwang jsonhng@donga.com