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Per Capita Tax Burden Rises Sharply

Posted June. 10, 2008 08:31,   


The average amount of taxes a Korean paid exceeded 4 million won for the first time in 2007.

The Ministry of Strategy and Finance and the Ministry of Public Administration and Security said yesterday that the nation’s national tax and local tax are estimated to reach 161.5 trillion won and 43.4 trillion won, respectively, last year. That means Koreans paid almost 205 trillion won in taxes last year.

When divided by 48.46 million, the number of Koreans, a Korean paid 4.22 million won in taxes in 2007, up 515,000 won from 3.71 million won in 2006.

With taxes growing faster than the nation’s gross domestic product, the tax burden ratio, which is the total amount of tax revenue divided by GDP, increased to 22.7 percent in 2007, up 2 percentage points from 2006.

Also, Koreans are likely to pay more in 2008.

The government estimates that it would collect 165.6 trillion won in national tax and 43.55 trillion won in local tax this year. That means a Korean has to pay 4.3 million won in 2008, up 75,000 won from a year ago.

A Finance Ministry official said, “Korea’s tax burden ratio is lower than 26.9 percent, the average of OECD member nations (as of 2005), but higher than 13 percent of Singapore and 12.7 percent of Hong Kong (as of 2005). We’ll lower the ratio to below 21 percent by 2012 via a series of tax cut measures.”