The tax revision is expected to affect some 93,000 wealthy people, including 20,000 highly-paid workers and 29,000 individuals who inherited their fortune. Meanwhile, some 129 companies are set to face higher corporate tax rates.
It is also predicted that the tax revision will bring in over $5 trillion in revenue for the South Korean government every year for the next five years. The authorities plan to use money to eliminate income disparities in society, create new jobs and achieve sustainable economic growth.
On Friday, the South Korean Minister of Strategy and Finance announced the main goals of the tax revision, which include creating new jobs, improving income redistribution and tackling weak growth. The decision of the finance ministry is contrary to the policy of former governments which lowered the income tax rate in 2009 to stimulate business and promised to expand social security programs without higher taxes.