[2024 National Audit] Among 1.8 Billion Won Earners, 126 Are 'Tax-Exempt'... Im Gwang-hyun "High Earners' Deductions and Exemptions Must Be Reviewed"

An Average Deduction and Exemption of 700 Million KRW Per Person

It was revealed that more than 100 individuals with an average income of 1.8 billion KRW are tax-exempt.

On the 16th, Im Kwang-hyun, a member of the National Assembly's Planning and Finance Committee from the Democratic Party of Korea, analyzed the '2022 Tax Year Integrated Income (Earned Income + Comprehensive Income)' percentile data submitted by the National Tax Service. The analysis showed that among high-income earners with an average income of 1.8 billion KRW, 126 individuals had no final tax amount (tax-exempt).

Im Kwang-hyun, member of the Democratic Party of Korea.

In 2022, the total salary of 26,231,458 integrated income earners was 1,058.719 trillion KRW, with an average of 40.36 million KRW per person. When dividing all income earners that year into percentile groups, the top 0.1% group consisting of 26,231 individuals had an integrated income of 4.71217 trillion KRW, with an average integrated income per person reaching 1.79641 billion KRW. The gap compared to the average income per person is about 44.5 times.

Income earners in the top 0.1% bracket are subject to tax rates ranging from 42% to 45% under the current Income Tax Act. In 2022, the taxable income of the top 0.1% income earners was 4.58927 trillion KRW, which is about 97.4% of their total income. Applying this to the average integrated income of 1.79641 billion KRW, Representative Shin estimated the average taxable income of the top 0.1% income earners to be approximately 1.7497 billion KRW.

Applying tax rates of 42% and 45% to the taxable income of 1.7497 billion KRW results in calculated tax amounts of 698.93 million KRW and 721.43 million KRW, respectively. If the final tax amount in this bracket is '0', it means that at least about 700 million KRW in taxes were deducted or exempted.

Among all integrated income earners, 8,051,765 individuals had no final tax amount. Their taxable income totaled 660.7927 trillion KRW, which is about 62.4% of the total income of 1,058.719 trillion KRW. Applying this to the average income of 40.36 million KRW, the average taxable income is estimated to be about 25.19 million KRW. Applying an income tax rate of 15% to this taxable income indicates that these 8,051,765 tax-exempt individuals received an average deduction or exemption of 2.52 million KRW.

Representative Im said, "Even though the taxable income relative to total income for the highest earners is not low, it appears that large-scale deductions and exemptions are granted to some taxpayers. It is necessary to closely examine the proportion of deductions and exemptions for high-income earners, including foreign tax credits, and review tax laws to ensure a fair tax burden."