The South Korean government's 10 billion U.S. dollars tax rebate scheme for low-income earners and self-employed small business owners will not dent the fiscal health of the government, a senior official has said.
Lee Young-geol, deputy minister for the budget office at the Finance Ministry made the remarks Tuesday on a local radio program.
Lee's comment came as some critics have warned that the large-scale tax rebate scheme, along with planned tax cuts, could hurt the fiscal strength of South Korea which has so far been strongly maintained.
"There would be no problem in injecting 10.5 trillion won if we use last year's 4.9 trillion won tax surplus and 5.2 trillion won tax revenues that are expected to come from tariffs and value-added tax over the next year," said Lee.
He said as oil prices are expected to remain high, tax income from tariffs and value-added tax will naturally increase.
On Sunday, the government and the ruling party announced a 10.5trillion won tax rebate and subsidy program to alleviate oil price burden on 12 million low income earners.
The government plan offers workers with an annual income of less than 35 million won and the self employed with annual income of less than 24 million won to receive up to 240,000 won in tax rebate over the next year. It also offers subsidies for truckers and farmers.
The Finance Ministry said that it will also consider extra oil cuts if Dubai oil price exceeds 170 U.S. dollars per barrel.
Source:Xinhua
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