- Kim Yoo-chan, chairman of the Inclusive Finance Forum, called for a temporary reduction in the value-added tax (VAT) on essential goods as part of measures to address high prices.
- The proposal to reduce the VAT on essential goods is being considered by the government and the ruling party, but faces skepticism from experts.
- Most citizens are not willing to vote for a party that focuses on tax cuts for the wealthy, according to a survey by the Participatory Solidarity.
- The proposal to increase the threshold for simplified VAT taxpayers and temporarily reduce the VAT rate on essential goods from 10% to 5% is being seriously considered.
- The current VAT system in Korea does not have a mechanism to adjust the tax rate for specific items, unlike in many OECD countries.
- Reducing the VAT rate on essential goods can help address the regressive nature of the tax system and ensure fair taxation based on ability to pay.
- Most OECD countries apply reduced VAT rates on essential goods, while Korea’s standard VAT rate is relatively high at 10%.
- Despite the lower VAT rate in Korea, the overall tax revenue from indirect taxes is balanced with income and corporate taxes, indicating a need for a fair tax system.
Source: khan.co.kr
Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.
