South Korea is reviewing adjustment in the Korean inheritance tax system, one of the heaviest in the world, but a major change may not take in near future, according to the finance minister.
“There are opposing views about the need of levy to prevent hand-down in wealth and the excessiveness of the levy. Due to the sensitivity of the issue, it must be considered in the context of plausibility and social acceptance,” Hong Nam-ki, deputy prime minister and minister of strategy and finance, told reporters Thursday, local time, on the sidelines of the G-20 meeting of finance ministers in Washington, United States.
Korea’s inheritance tax is one of the heaviest in the world. Maximum 50 percent rate is imposed on inherited wealth exceeding 3 billion won ($2.5 million) and separate 20 percent levy on stock bequest.
Samsung family members had to give up 2.2 trillion won worth shares in Samsung flagship companies to afford their heavy tax from inheriting estate from their late patriarch Lee Kun-hee. The late chairman left about 26 trillion won worth wealth including stocks worth 19 trillion won. They faced 12 trillion in inheritance tax.
The government has outsourced research on amending the country’s rigid inheritance system.
The government is also reviewing the option of shifting to inheritance acquisition tax, which levies tax on each of the acquired inheritance rather than total inheritance value.
At the earliest, a change may be reflected in next years’ tax code outline, Hong said.
Meanwhile, the finance minister expected the annual inflation rate to exceed 2 percent and government-set estimate of 1.8 percent. The government will freeze gas charge until the year-end despite the spike in international prices as not to fuel inflationary pressure.
[ⓒ Pulse by Maeil Business News Korea & mk.co.kr, All rights reserved]