In a plenary session on December 30, the National Assembly passed an aggregate real estate tax bill that will impose heavier taxes on property with more than 600 million won value, expanded from the current 900 million won, and that will change the basis of the taxation from individuals to households.
The two changes were made as a part of new tax measures that make up the governments tough anti-speculation policy.
Parliament voted for a total of 18 schemes, including a budget bill of 144.8 trillion won for the fiscal year 2006 and an extension motion that will extend the Korean troop deployment in Iraq for another year.
Present were representatives of the ruling Uri Party, Democratic Party, Democratic Labor Party, and United Liberal Democrats. The major opposition Grand National Party (GNP) was absent. The GNP boycotted the parliament, demanding the nullification of the private school reform law.
This is the first time that the National Assembly has passed a budget bill without the major opposition party present in constitutional history. The size of the passed budget bill is 900 billion won smaller than that of the bill proposed by the government of 145.7 trillion won.
The special accounts budget was reduced by 234.9 billion won to 57.16 trillion won from what the government had proposed, and the operations fund was set at 358.17 trillion won, 379 billion won less than what had originally been budgeted. The amount reduced during deliberations from the governments proposal was 1.5183 trillion won.
The new aggregate real estate tax law will increase the tax base from the current 50 percent to 100 percent by 2009 on a gradual basis, and up the limit of tax increases from 1.5 times the previous year to three times.
The revised income tax bill will double what homeowners pay from the current nine to 36 percent capital gains tax to a 50 percent tax, and gradually shift tax collections from standard prices set by the government to the actual sale price on market.
The government held a state council meeting at 10:00 a.m. under Prime Minister Lee Hae-chan and voted for the promulgated tax bills.
A government official explained that various bills will be enforced from January 1, so the bills should pass the state council and be recorded on the official gazette by December 31.
The extension bill that passed the National Assembly will extend the deployment of Korean troops in Iraq for another year by the end of 2006. The size of the troop deployment will be reduced from 3,700 to 2,300.