Roh Vetoes Bill on Return of Taxes Related to Public School Property

President Roh Moo-hyun yesterday vetoed a special legislation regarding the return of wrongly collected taxes for the purchase of public school property.

Cheon Ho-seon, a spokesperson for the Cheong Wa Dae, said yesterday that the cabinet members passed a vote against the bill at a council meeting.

Local governments placed the cost burden to acquire land for public schools on apartment home buyers. The special act says the central government is responsible for returning the improperly-collected taxes.

Under the school land fee system, designed to secure lots for public schools and effective since 2000, construction firms of an apartment complex of more than 300 households are required to pay 0.7 percent of the sales receipts.

So far, 566.4 billion won has been collected under this scheme. The Constitutional Court, however, ruled in March 2005 that it was unconstitutional to require private individuals or firms to pay for the costs related to land acquisition.

“The act undermines the law, given it requires the government to return the taxes before the Constitutional Court’s ruling,” the presidential spokesman explained. “Moreover, it goes against the principle of legal equality and would have significant negative impact on state finances.”

Prior to this, despite the opposition from the government, lawmakers held a plenary session at the National Assembly with 223 lawmakers present and passed a bill in an overwhelming 216-7 vote. Many, however, criticized the measure as some blamed lawmakers for catering to local residents in anticipation of the general elections on Apr. 9.

The government believes that it is unfair for the central government to return the tax since local governments were responsible and that therefore, local governments should refund the taxes, if necessary.

Although President Roh vetoed the bill, a two-thirds majority vote in the Assembly can overturn the presidential veto and enact the proposed legislation.

The Grand National Party said it would review whether the bill was unconstitutional and whether President Roh’s veto was legitimate. Meanwhile, the United New Democratic Party clarified its resolution to overturn the president’s veto, saying, “The proposed legislation benefits the majority of the public and the nation.”

jin0619@donga.com