The presidential office Monday ruled out a tax hike as it renewed calls for the reform of South Korea’s rigid labor market to help create jobs for young people.
“The government’s position remains unchanged that a tax hike is the last resort,” An Chong-bum, the senior presidential secretary for economic affairs, told reporters.
He said the government is making efforts to expand sources of tax revenue, noting a tax hike could cause many side effects, though he did not elaborate on what these could be.
His comments came a day after Won Yoo-chul, the floor leader of the ruling Saenuri Party, said his party is willing to consider raising the income tax.
Last month, Finance Minister Choi Kyung-hwan said in a parliamentary session that the government was not planning to raise corporate taxes to deal with revenue shortfalls, noting that marking up corporate taxes goes against the global trend and will not benefit the economy.
Currently, South Korea’s corporate tax rate for large companies stands at 22 percent.
Opposition lawmakers have called on the government to raise the corporate tax rate in order to secure money to finance increasing fiscal spending.
An also pressed a tripartite committee composed of the government, businesses and labor organizations to resume dialogue and make concessions to produce a deal meant to reform the country’s labor market. The dialogue has been stalled since April when an umbrella labor union walked out of the negotiations.
“Labor and management should put down their vested interests for the employment of young people,” An said, noting the unemployment rate for young people hit an all-time high in June.
The unemployment rate for young people between the ages of 15 and 29 stood at 10.2 percent in June, compared to the overall jobless rate of 3.9 percent in the same period, according to government data. (Yonhap)
