From the New Year, Resident Tax Rates May Vary by Eup, Myeon, and Dong... Ulsan City's Proposal for 'Local Tax Act Amendment' Passed, Differential Tax Rates Applied

Momentum Builds for 'Citizen Participation Village Grant Project' Implementation

Amendments to the Local Tax Act.

[Asia Economy Yeongnam Reporting Headquarters Reporter Kim Yong-woo] From the new year, the resident tax rates will be applied differently by eup, myeon, and dong. This follows the passage of the "Local Tax Act Amendment" proposed by Ulsan City through the National Assembly.

Ulsan City announced on the 14th that the "Resident Tax (Individual Portion) Differential Rate Application Plan by Eup, Myeon, and Dong," proposed to the government last March for the stable financial operation of the "Citizen Participation Village Grant Tax Project," which returns the individual resident tax to the village, was included in this "Local Tax Act Amendment" and passed the plenary session of the National Assembly on the 9th.

The amended Local Tax Act stipulates that "the tax rate for the individual portion of the resident tax (currently 10,000 KRW per household) can be set differently by eup, myeon, and dong through ordinances within 15,000 KRW if requested by residents."

Accordingly, if residents wish, the village grant tax budget can be increased according to the characteristics of the village, which is expected to further activate the project.

An official from Ulsan City said, "This is the first time among various taxes such as national and local taxes that tax rates can be set differently by eup, myeon, and dong, and it is also the first case to allow residents to request a tax rate increase. It has great significance in establishing a practical financial case for autonomous administration."

Ulsan City announced the promotion of the "Ulsan-type Village New Deal Project" in October last year, launching the "Village Grant Tax Project."

This year, the entire amount of 3.912 billion KRW collected from the individual resident tax was allocated to 56 eup, myeon, and dong, starting the "Citizen Participation Village Grant Tax Project" for the first time nationwide.

With this amendment to the Local Tax Act, the financial expansion of the "Village Grant Tax Project" is expected to boost the Ulsan-type Village New Deal Project, including fostering village enterprises.

Ulsan City's "Citizen Participation Village Grant Tax Project" has been gaining attention, winning the highest grade, Grade 1 award, at the "2021 Local Government Excellent Policy Competition" held in November this year.

Additionally, the amendment reflects the long-standing demand from local governments to increase the tax rate for the Regional Resource Facility Tax. The tax rate for the "Thermal Power Generation Regional Resource Facility Tax" will be doubled from 0.3 KRW per kWh to 0.6 KRW starting in 2024.

Accordingly, the tax revenue from the thermal power generation regional resource facility tax in the Ulsan area is expected to increase from about 3.2 billion KRW annually to 6.4 billion KRW.

The Regional Resource Facility Tax is separately allocated to a special account for regional resource facility tax and used for citizens' safety, disaster prevention measures, environmental protection, and improvement projects.

The 2021 Local Tax Act Amendment will take effect from January 1 of next year.

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