Ruling, opposition lawmakers propose 'unification tax' bill

Twelve ruling and opposition lawmakers have introduced a bill that would make it legal for South Korean taxpayers to pay for the expected massive cost of an eventual reunification with North Korea, a ruling party lawmaker said Saturday.

While reunification of the two Koreas is still a distant goal, it was the first time that lawmakers proposed such a bill to the National Assembly that would require South Koreans to directly pay for a "unification tax" since President Lee Myung-bak introduced the idea last year.

"So far, abstract talks of unification have been varied, but practical preparations are insufficient," said Rep. Kim Choong-whan of the ruling Grand National Party, one of the 12 lawmakers.

"Given the fact that the current tax revenues make it difficult for (South Korea) to cope with the cost of unification, we proposed the unification tax bill to save up the cost and encourage people to take part in preparations for unification," Kim said. 

According to the proposed bill, individuals and companies would be required to pay 2 percent of their income tax to save up for the cost of unification. Also, businesses would pay 0.5 percent of their corporate tax as unification tax, and individuals would pay 5 percent of inheritance or gift taxes.

Despite icy relations between the two Koreas and no obvious signs that such reunification is possible in the near future, President Lee suggested the idea of collecting a unification tax in August last year.

The two Koreas have been divided for more than six decades and have yet to sign a peace treaty to formally end the 1950-53 Korean War.

Inter-Korean relations badly frayed last year following a set of military aggressions from the North, including the November bombardment of Yeonpyeong Island that killed four people and the March torpedoing of a warship in which 46 sailors died. (Yonhapnews)