Taxi Company Tax Exemption Extended

The government and the ruling Uri Party have decided to extend the surtax exemption for taxi companies by two years. The exemption was to expire by year’s end.

The decision came two months earlier than usual. The government usually carries out its review on the current tax exemption articles around June. So such an earlier decision has raised suspicions that it is a pork barrel move targeting the May local elections.

The government and the ruling party convened a meeting with the presence of Kang Bong-gyun, Uri Party policy committee director, Woo Je-chang, the third policy coordination committee director, and Bahk Byong-won, Vice Minister of Finance and Economy and decided to extend the surtax exemption for taxi companies.

This move is likely to draw criticism in that the decision was made without following normal procedures. Article 142 in the Special Tax Treatment Control Law stipulates that ministers of each ministry should submit their tax exemption evaluation papers to the Minister of Finance and Economy by the end of May. After accepting the evaluation sheets, the Ministry of Finance and Economy (MOFE) decides whether to abolish or extend a specific tax exemption through consultation with ministries, the government and the ruling party in June. An official at the MOFE also agreed that the recent decision was made hastily compared with the usual procedure.

Hyun-Jin Park witness@donga.com