The Korea Herald

지나쌤

Religious tax legislation postponed

Further delay expected due to local elections next year, analysts say

By Park Hyung-ki

Published : Dec. 24, 2013 - 20:09

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Lawmakers of the National Assembly’s Strategy and Finance Committee decided Tuesday to postpone the legislation of an amendment that involves levying income taxes on religious groups.

Twelve committee lawmakers tentatively reached a consensus to impose income taxes on priests and Buddhist monks, but they still needed further discussion over the matter.

The committee said it would try to put the revision into legislation during the next session of the National Assembly in February 2014.

The government proposed a tax code revision last August to levy a 4.4 percent tax on incomes of religious leaders such as priests and monks beginning in 2015.

Lawmakers are reportedly still trying to reach an agreement with religious leaders over the matter including how to classify incomes in the religious sector separately from other workers.

Political analysts suggested that the National Assembly could further delay the legislation due to regional elections next year when political parties campaign for votes from the influential religious sector.

Taxation of religious leaders has been a source of contention over the last 40 years as some priests, monks and politicians argued that imposing taxes on donations or the spirit of giving and sharing was unjustifiable.

The revision was in line with the Park Geun-hye administration’s pledge to increase welfare spending, especially for the low and mid-class families amid a shortfall in tax revenue.

Of the 135 trillion won ($127.3 billion) to finance welfare, 53 trillion won will come from government revenue sources, with the rest secured through budget restructuring, the Ministry of Strategy and Finance noted.

The administration has said it will not introduce or raise taxes but rather reduce the number of tax exemptions and benefits given since the global financial crisis of 2008.

The Ministry of Strategy and Finance also proposed to raise the baseline income dividing the top and mid- to low-income earners from 34.5 million won to 55 million won as part of its tax code revision in August.

This would significantly decrease the number of workers facing a tax burden from the government’s earlier proposal to about 2 million people, from more than 4.3 million.

Those with an annual salary of more than 55 million won will face tax hikes, while those with less than that would be categorized as mid- and low-income earners and receive bigger tax deductions.

By Park Hyong-ki (hkp@heraldcorp.com)