SEJONG (Yonhap News) ― South Korea seeks to secure 15 trillion won ($13.5 billion) over the next five years by streamlining its tax exemptions and reduction programs, the Finance Ministry said Tuesday.
The move comes as policymakers are reviewing diverse ways to raise money to finance expanded welfare programs sought by the new government, which started its five-year-term in February.
“In order to satisfy the growing fiscal demand, we need to raise 15 trillion won over the next five years by streamlining tax exemption and reduction systems,” the ministry said.
The ministry said that it is seeking to raise 1.8 trillion to 2 trillion won through such efforts this year alone.
In a related move, the ministry said that it will “in principle” call for an end to all soon-to-be-expired tax exemption and reduction programs.
Most of the tax breaks have been temporarily introduced for specific purposes including boosting corporate investment or providing support for smaller businesses and low and middle-income earners. The government has customarily extended many such programs for years.
The ministry said that it will review all the merits of each program before deciding whether to keep it in place or let it expire.
The move is part of the ministry’s basic tax spending plan for this year. It will be officially given to government agencies and ministries by the end of this month.
Those agencies and ministries will have to submit their tax break proposals to the finance ministry by the end of May. The ministry will then deliberate the merits of individual programs before reflecting final decisions into its annual tax code overhaul plan to be unveiled in August.
