The costs caused by regulations in South Korea topped 10 percent of gross domestic product, a business lobby said Wednesday, arguing that eased regulations could help result in stimulating job creation and economic growth.
  

The regulatory cost is calculated by taking into consideration expenses related to market regulations, bureaucracy and tax policies. In particular, the cost from market regulations is based on a gap between national income under a regulation-free economy and the income under the real economy.
  

According to a report by the Federation of Korean Industries, the gross cost stemming from regulations came to 158.3 trillion won ($148.4 billion) in 2013, representing 11.1 percent of the country's gross domestic product.
  

The estimated cost is more than three times larger than the 43.9 trillion won that companies had to pay in corporate taxes in 2013, the report noted.
  

When broken down into each industry, the report estimated that the cost for the service sector came to 93.6 trillion won, while that for the manufacturing sector stood at 49.2 trillion won.
  

The cost from market regulation, among other things, came to 103.5 trillion won, up from 65 trillion won tallied in 2006 in a similar report conducted by a private think tank.
  

The country's market regulation index stood at 1.88 in 2013, the fourth-highest among 31 countries of the Organization for Economic Cooperation and Development and it was also higher than the OECD average of 1.46. A higher index means more regulatory costs.
  

The report underlined the benefits of deregulation, saying that if the regulation index drops to the OECD level, the country's GDP could grow by 1.6 percent with nearly 300,000 jobs possibly added to the economy.
  

"To tackle the current low-growth phase of less than 3 percent and create jobs, we need tireless and stepped-up regulatory reforms," the FKI said. "Especially, reforms should be carried out on regulations related to the Seoul metropolitan area, retailers and holding companies as well as the service sector." (Yonhap)