Reasons for Proposal
Due to the spread of COVID-19, wage and salary income in the first income decile decreased 18% in the second quarter of 2020, 4.5 times higher than 4% in the fifth decile, and income is lagging mostly among low income groups.
In addition, a shift towards unmanned automation has been accelerated by the transition to a contactless economy, resulting in an expected decrease in the number of jobs especially among low income groups, which calls for improving fairness among income taxation and strengthening income redistribution.
This Act aims to create a bracket ranging from > 700 million won to ≤ 1 billion won in the tax base of global income and set the tax rate of 44%, and create a bracket exceeding 1 billion won and set the tax rate of 46% (Article 55 paragraph 1).
Notes
This Act needs to be designated as a legislative bill annexed to the 2021 budget bill under Article 85-3 paragraph 4 of the National Assembly Act.
Major Provisions
Article 55
