A new report is out on how the government's corporate tax hikes are putting great financial stress on local companies.
Ko Roonhee reports.
In 2017, the South Korean government increased its corporate tax rate to 25 percent from 22 percent for companies making net profits exceeding 263 million U.S. dollars a year.
This move was intended to create a wider tax revenue base and give smaller businesses a helping hand.
According to the Korea Economic Research Institute on Wednesday, the increase in corporate tax revenue was around 4-billion U.S. dollars last year,... more than double the government's projection.
The research was based on 517 KOSPI-listed non-financial companies... with the analysis focused on 38 of them subject to the government's tax hike to 25-percent.
The institute added... that the actual amount will be even larger...because its research was only centered on listed firms.
An expert says the higher corporate tax rate is hurting the economy.
"The burden of high corporate tax rates will negatively affect companies' investment and employment activities. Sluggish exports and low domestic demand just makes matters worse."
Then how can the tide be turned?
The institute suggests reducing the corporate tax rate like other countries,... including the United States.
If this measure is not feasible, the institute says various support measures such as providing other tax benefits could also be considered.
Ko Roon-hee, Arirang News.