[Asia Economy Sejong=Reporter Son Seon-hee] Deputy Prime Minister and Minister of Economy and Finance Choo Kyung-ho urged the passage of the special Comprehensive Real Estate Tax (Comprehensive Tax) bill pending in the National Assembly on the 24th, stating, "If it is not passed by the end of August at the latest, even if we want to reduce the Comprehensive Tax burden, we will have no choice but to apply the existing law's heavy taxation measures."
Deputy Prime Minister Choo made these remarks while attending the plenary meeting of the National Assembly's Planning and Finance Committee in the afternoon, emphasizing the necessity of passing the Comprehensive Tax Act amendment, which raises the basic deduction standard for one-homeowners from 1.1 billion KRW to 1.4 billion KRW. He estimated that approximately 400,000 people would see a reduction in their Comprehensive Tax burden under this amendment. With the special Comprehensive Tax application scheduled for mid to late next month, failure to pass the amendment within this month is expected to cause significant administrative confusion.
The Comprehensive Tax Act amendment promoted by the government and ruling party includes introducing a special deduction of 300 million KRW for one household one homeowner, raising the deduction amount from 1.1 billion KRW to 1.4 billion KRW, and allowing elderly one household one homeowners to defer Comprehensive Tax payments until the time of inheritance or disposal of the house.
Deputy Prime Minister Choo said, "This year, the official price of apartment complexes rose by more than 17%, increasing the Comprehensive Tax burden excessively, and both ruling and opposition parties pledged to reduce the burden during the presidential election process." He added, "Since Representative Ryu proposed lowering the Comprehensive Tax burden to the 2020 level with this intention, it is reasonable and urgent to process it."
Commissioner Kim Chang-ki of the National Tax Service also expressed concerns, saying, "Between September 5 and 10, we must finalize the list of recipients to send guidance letters, accept special application requests, correct errors, calculate tax amounts, and issue tax bills by the end of November." He warned, "If the law amendment is not finalized, we cannot finalize the list of recipients, which means special applications cannot be made by the end of September, potentially leading to excessive tax billing." He added, "Taxpayers must calculate and report their tax amounts in December, but the complex structure of Comprehensive Tax calculations may cause confusion."
However, the Planning and Finance Committee did not discuss the amendment due to the absence of Democratic Party members, who hold the majority of seats. This was a protest against the ruling party's unilateral convening of the plenary meeting amid a power struggle over the formation of the tax subcommittee between the ruling and opposition parties.
Democratic Party Planning and Finance Committee members held a press conference earlier, criticizing, "The special deduction for Comprehensive Tax is a clear tax cut for the wealthy few owning high-priced houses." They added, "Last year, the basic deduction amount was already raised from 900 million KRW to 1.1 billion KRW to ease the tax burden on one-homeowners, which means the basic deduction amount has been adjusted every year from 2020 to 2023."
However, the Democratic Party shows some consensus on parts that allow payment deferral for the elderly and long-term holders, or exceptions when judging one household one homeowner status for temporary two-homeowners or inherited houses.
With the plenary session scheduled for the 30th, the party whips of both sides agreed to renegotiate the standing committee schedule.
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