May 25, 2020 12:47
The tax burden shouldered by each Korean citizen last year surpassed W10 million for the first time ever (US$1=W1,240).
According to United Future Party lawmaker Choo Kyung-ho on Sunday, per-capita tax payments last year reached W10.1 million, up 3.2 percent from 2018. That includes state pension and health and other mandatory insurance payments and has jumped a whopping 47 percent from W6.89 million in 2013.
National and local tax revenues alone totaled W384.8 trillion in 2019, or W7.44 million per citizen. State pension payments stood at W924,000, health insurance at W1.14 million and unemployment insurance at W215,000. On top of that, each taxpayer paid another W421,000 in welfare-related taxes.
The ratio of total tax payments to GDP rose from 26.8 percent in 2018 to a record 27.4 percent last year. But the rate of increase slowed from 1.4 percentage points to 0.6 percentage points over the same period because tax revenues rose more slowly due to a slow economy, although health insurance and other welfare-related payments increased significantly.
Korea's tax-to-GDP ratio is still below the OECD average of 34.2 percent but increasing quickly, with 2.3 percentage points between 2013 and 2017 compared to the OECD average of 0.8 percentage points.
And it will keep rising even more sharply as the coronavirus epidemic further boosts state spending on health and welfare in an already aging society.
That will end up worsening the nation's fiscal health and increasing taxes to bolster national coffers.
The state-run Korea Development Institute recently pointed out that sovereign debt is increasing "very fast" due to expanding welfare programs and recommended that the government start discussing long-term tax increases to boost fiscal income.
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