Many South Koreans may have to pay more in income taxes this year if the government removes the relief it granted 12 years ago on credit card spending when it announces its taxation policy next month.
To promote the use of payment cards, the Korean government in 1999 offered a 20% tax deduction to working citizens who used credit cards to spend at least 20% of their annual incomes. It raised the spending threshold to 25% last January while offering the same tax deduction (
“There is news [circulating] among tax analysts that this offering might be lifted [in its entirety],” an official from the Credit Card Finance Association of Korea tells PaymentsSource. “If that happens, citizens will have to pay more tax to the government.”
She declined to speculate on how much the government might receive if it lifts the deduction.
However, local news channel Arirang speculates that about 40% of Koreans could be affected and combined would have to pay more than 1 trillion won (US$900 million or 662 million euros) in new taxes.
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