Ulsan City’s Proposal for ‘Differentiated Resident Tax Rates’ Accepted by Government... ‘Local Tax Act Amendment’ Legislative Notice

Village Local Allocation Tax Project Gains Momentum, "Realizing True Resident Autonomy"

Ulsan City Hall.

[Asia Economy Yeongnam Reporting Headquarters Reporter Kim Yong-woo] Ulsan City’s proposal for the “Differential Application of Personal Resident Tax Rates by Eup, Myeon, and Dong” submitted to the government in March this year has been reflected in the “Local Tax Act Amendment Bill.”

According to Ulsan City on the 15th, the government announced the legislative notice of the “Local Tax Act Amendment Bill” on the 11th, which allows the personal resident tax (10,000 KRW per household) levied every August to be set differently by eup, myeon, and dong within 15,000 KRW by ordinance if residents wish.

The personal resident tax is currently a “membership fee-like” tax that imposes 10,000 KRW per household uniformly on all residents of Ulsan City. In 2020, the total collection of personal resident tax in Ulsan was 3.912 billion KRW across 56 eup, myeon, and dong.

In October 2020, Ulsan City announced the promotion of the “Ulsan-type Village New Deal Project” and the “Village Grant Tax Project.” Accordingly, from this year, the personal resident tax paid by local residents will be returned to the area and used as the budget for the “Village Grant Tax Project.”

Once the Local Tax Act Amendment Bill is implemented, residents will be able to set the personal resident tax rate differently by eup, myeon, and dong if they wish, and decide on the use of the paid tax themselves.

An official from Ulsan City said, “If the amendment passes the National Assembly, it will truly realize resident autonomy.”

He added, “We expect the ‘Citizen Participation-type Village Grant Tax Project,’ which Ulsan City is pioneering nationwide from this year, to gain even more momentum.”

Key points of the Local Tax Act Amendment Bill include a three-year extension of local tax reductions for medical institutions supporting infectious disease prevention and treatment due to COVID-19, local tax reductions for rental housing by housing lease business operators and first-time home purchases (extended for two years) to stabilize housing for low-income people, and acquisition tax reductions for electric and hydrogen vehicles to achieve carbon neutrality.

The Local Tax Act Amendment Bill will be open for legislative notice until the 31st of this month to collect opinions from various sectors, followed by review by the Ministry of Government Legislation and approval by the Cabinet, and is scheduled to be submitted to the regular National Assembly session at the end of September.