Taxing decision

8 December 2017 By William Pesek

President Moon bucked global trends by raising South Korean corporate taxes to 25 pct from 22 pct and lifting the minimum wage. That will help curb the giants stifling competitiveness and fuelling inequality. Next comes tightening antitrust screws and lowering takeover barriers.

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In sessions on Dec. 5 and 6, South Korean lawmakers voted to raised the minimum wage to 7,530 won ($6.88) per hour, a 16.4 percent boost. President Moon Jae-in aims for 10,000 won by the end of his term in 2022.

Along with raising corporate levies to 25 percent from 22 percent, the government hiked taxes on individuals taking home more than $455,000 to 42 percent from 40 percent. Policy tweaks in the 2018 budget could raise government revenue by almost 8 percent.

The Federation of Korean Industries criticized the hike, claiming that going against international tax trends will “decrease Korean companies’ global competitiveness” and “hinder investment and thus job creation.”

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