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Per Capita Income Tax Expected to Reach 1.53 Million Won Next Year

Per Capita Income Tax Expected to Reach 1.53 Million Won Next Year

Posted October. 04, 2005 03:07,   


It is estimated that the per capita income tax for salary earners will rise 140,000 won from this year’s amount to reach 1.53 million won next year.

The Ministry of Finance and Economy (MOFE) announced Monday that the government plans to collect income tax totaling 12.0321 trillion won next year, a 12.4 percent increase from this year’s 10.7029 trillion won.

From January to August this year, the average number of income workers was 15,121,500. Considering that 51 percent of these people are low income workers who do not pay taxes, the actual number of tax-paying workers is 7,712,000.

Assuming that income workers increase by two percent from this year, the number of tax payers next year will be 7,866,000. Dividing next year’s planned income tax collection of 12.0321 trillion won by the number of taxpayers produces a per capita income tax of 1.53 million won.

A three percent increase in the number of income workers next year would translate into a per capita income burden of 1.51 million won.

From 2001 to 2004, income workers grew by an average rate of 2.75 percent.

This means that the per capita income tax will amount to somewhere between 1.51 million to 1.53 million won next year, which is 120,000 to 140,000 won (8.6 to 10.1 percent) higher than this year’s estimated amount of 1.39 million won.

In addition, the number is a 38 percent increase from 1,108,000 won five years ago in 2001.

The total income tax was 7.1461 trillion won in 2001, 6.9334 trillion won in 2002, 7.6412 trillion won in 2003, and about 9.8 trillion won last year. This year’s expected amount is about 10.7029 trillion won.

Next year, the income tax is expected to represent 8.8 percent of the entire national tax of 136.0092 trillion won, 0.3 percentage points higher than this year’s share of 8.5 percent.

The MOFE said, “In 2003, the top 10 percent of income earners whose average income was 72 million won, paid 56.6 percent of the total income tax. In this regard, the tax burden on an average worker would be lower than what the statistics suggest.”

Ki-Jeong Ko koh@donga.com