Prime Minister Hwang Kyo-ahn said Monday the government will make efforts to avoid tax hikes that may burden the people and businesses, amid calls by the opposition parties to raise corporate taxes.
"Increasing tax will emerge as the burden for the people and should be the last thing the government should consider," Hwang said during his parliamentary interpellation session. He stressed that Seoul has no plans to raise corporate and income tax for the time being.
"Rather than increasing taxes, we will seek to expand the tax revenue base reducing tax waivers," Hwang added. "We will make efforts to lower the burden on local companies by avoiding unnecessary tax audits."
Korea's ruling and opposition parties have been colliding over the expansion of corporate tax, amid the Minjoo Party of Korea's push to slap more taxes on conglomerates.
The ruling Saenuri Party, however, claims that an increase in tax will only burden Korea's economy, especially as Britain's exit from the European Union continues to fuel global market uncertainties.
Finance Minister Yoo Il-ho echoed the view, adding that an increase in corporate taxes will also adversely affect investment.
"Considering that countries tend to compete fiercely on corporate taxes, it is risky for South Korea to seek an increase, when other countries are seeking to lower them," the policymaker said, adding such a move will induce investors into setting eyes on other markets.
Minjoo, however, claimed that it is the government's role to collect more taxes from companies and share them with economically vulnerable segments of society.
"The sustainability in employment and growth is only possible if the fruit of change are shared by society as a whole," Kim Jin-pyo, a Minjoo lawmaker said.
Hwang, meanwhile, added the government will also speed up investigations on Daewoo Shipbuilding & Marine Engineering Co., a troubled shipbuilder.
"While saving the country's shipbuilding industry, the investigation also must be made in a short period focusing on core areas," Hwang said. "Actions against irregularities are not aimed at weighing down the industry but saving it."
"South Korea still is competitive in the shipbuilding industry and has the lead in technology as well. We need to hold on to it and prepare for the future," he added.
On Monday, a former CEO of Daewoo Shipbuilding was summoned as prosecutors widened their probe into the financially troubled firm's alleged accounting fraud and poor management.
Ko Jae-ho, who headed the shipyard from 2012 to 2015, is suspected of committing accounting fraud worth some 5.4 trillion won ($4.6 billion) from 2012 to 2014 by underreporting the production cost and exaggerating profits.
Amid the allegation that former President Lee Myung-bak's administration was involved in the case surrounding Daweoo, Hwang said the government will continue to "investigate based on evidence."
"Prosecutors will continue to investigate all allegations raised," Hwang said, adding it will also take actions against Korea Development Bank, the main creditor of Daewoo, if there are "questionable" actions were taken by the bank. (Yonhap)
