"7 out of 10 Citizens Experienced Increased Tax Burden in the Last 5 Years... '64.6% Oppose Tax Hikes'"

[Asia Economy Reporter Jeong Hyunjin] Seven out of ten Koreans feel burdened by increased tax obligations over the past five years. Many also perceive the current tax system as unfair due to significant differences in tax burdens depending on taxpayers and income types, or because the system favors or disadvantages certain income groups. Opposition to tax increases exceeds 60%, greatly outnumbering support.

On the 21st, the Korea Economic Research Institute under the Federation of Korean Industries commissioned Mono Research to survey 1,026 men and women aged 18 and older nationwide on 'Public Perception of Tax Burden.' The results showed that 74.6% of respondents believed their tax burden had increased over the past five years. The tax items perceived to have increased the most were acquisition tax, property tax, and comprehensive real estate tax at 32.0%, followed by the four major social insurances and various charges at 25.2%, and earned income and business income taxes at 22.7%.

(Data from Korea Economic Research Institute)

Additionally, 65.0% of respondents felt that their perceived tax burden was high relative to their current income, significantly exceeding half. The tax items considered most burdensome were acquisition tax, property tax, and comprehensive real estate tax (28.9%), earned income and business income taxes (28.6%), and the four major social insurances and various charges (24.2%). By income level, an average of 62.7% of respondents in the 1st to 2nd income quintiles felt the tax burden was high, whereas 74.8% of those in the 4th to 5th quintiles responded similarly, indicating that higher-income groups feel a relatively greater tax burden.

Seventy-four point seven percent of Koreans also believed the current tax system is unfair. The most common reason for perceiving unfairness was that "the tax system favors or disadvantages certain income groups," cited by 38.9%. Other reasons included "significant differences in tax burdens depending on taxpayers and income types despite similar income levels" (23.8%) and "insufficient welfare benefits relative to taxes paid" (23.2%).

By income level, the middle-income group (3rd quintile) showed the highest perception of tax system unfairness, with over 80% responding negatively. The Korea Economic Research Institute analyzed this as reflecting the middle class’s perception that they receive relatively fewer tax exemptions compared to low-income groups and fewer income and tax credit benefits compared to high-income groups.

Amid calls for tax increases due to disaster relief payments related to COVID-19, 64.6% of respondents opposed raising taxes. More than half of those opposing tax increases cited "taxes being wasted or not managed transparently" as the reason. Other reasons included "high potential for conflicts between income groups during the tax increase process" (19.5%) and "no guarantee that welfare levels will improve even if taxes increase" (16.5%).

Aside from tax increases, the tasks for maintaining sound finances and securing stable tax revenues included strengthening transparency in the tax system and tax administration (32.4%), improving efficiency in various welfare expenditures (21.5%), and restructuring expenditure (20.7%).

Choo Kwang-ho, Director of Economic Policy at the Korea Economic Research Institute, said, "With the public feeling a high tax burden and significant dissatisfaction with tax fairness, premature tax increases could be harmful. Prior to raising taxes, it is essential to improve fiscal expenditure efficiency and enhance tax policy trust by promoting tax equity and transparency."

This content was produced with the assistance of AI translation services.