The government will also formulate a bill on the so-called "percentage law," whereby it will give a certain portion of people’s income tax to charities chosen by taxpayers.

According to a government official, the policy was included in Cheong Wa Dae's "40 new national tasks," which the presidential office finalized based on views it gathered from various government offices since April.

The government “has set a basic policy to turn the current transportation tax, which will be effective until 2009, into carbon tax or an environment-friendly tax this year. After a revision bill of the current law is introduced in 2009, the new law will go into effect in 2010.” A considerable portion of revenues from this tax, which amounts to W11 trillion (US$1=W1,055) annually, will be used as a financial source for the "low carbon, green growth" vision put forward by President Lee Myung-bak in a speech marking the anniversary of national liberation last Friday, he added.

About 80 percent of revenues from the current transportation tax have been used to improve transport infrastructure like road construction.

Under the percentage law, the government will collect up to 1 percent of income tax payments to deliver to NGOs or non-profit organizations which taxpayers choose when they file their tax returns. The subsidy will likely reach up to W200 billion annually, considering that the income tax payments reached W20.3 trillion in 2007.

(englishnews@chosun.com )