S. Korea committed to lowering corporate tax rate: finance minister

SEOUL, Aug. 22 (Yonhap) -- South Korea will keep pushing for corporate tax reductions as promised, the nation's top economic policymaker said Monday, adding that the tax burden on companies here remains higher than in other major economies. Finance Minster Bahk Jae-wan made the remarks amid opposition from politicians over the government's stance on the country's tax policies. The Lee Myung-bak government has been seeking to reduce income and corporate tax rates since its inauguration but many lawmakers oppose the plan, saying that it will end up benefiting mostly wealthy people. "The ratio of corporate tax revenue to our gross domestic product is higher than many other advanced nations, including OECD members, which means that we are imposing more tax burdens on companies," Bahk told a forum held in central Seoul. "In the era of global competition, my opinion is that we should go in the similar direction (as other major economies when it comes to tax polices). In particular, we should take into account the fact that many other major economies lowered tax burdens." The remarks came as both the ruling Grand National Party and main opposition Democratic Party have called on the government not to lower taxes for large businesses and the wealthy. Lowering taxes across the board is one of incumbent President Lee Myung-bak's main policy goals. Taxes levied on the middle class, and small and medium enterprises have already been lowered in the past few years. Bahk noted that Korea needs to closely monitor other nation's stance on tax policies, especially citing eurozone countries, which are pushing to further lower their corporate taxes. "Globally, it is a broad policy trend that consumption taxes are being raised, but income taxes are being lowered," he added. Meanwhile, touching on economic policies, the minister cautioned against demand from some experts that the government has to introduce economic stimulus measures as concerns are growing that the global economy might slip back into a recession. "Some raise the need for extra budget and others call for the government to take expansionary policies, but we have to know that fiscal crises confronting advanced countries at this moment were caused when they opted for such an easy way," he said. "We are being tempted to take this easy way, but we need courage to eliminate this temptation."