Finance ministry stresses need to reduce maximum corporate tax rate

A total of 103 companies, a mere 0.01% of the total number of corporations in South Korea, are paying more than 40% of the country’s total corporate tax.

The Ministry of Economy and Finance unveiled reference data on Tuesday concerning the need to lower the maximum corporate tax rate from the current 25% to 22% and to also reduce the number of tax rate brackets from the current four to just two or three. 

The Yoon Suk-yeol administration submitted an amended tax bill to the National Assembly in September but was met with fierce opposition by the liberal opposition party.

According to the finance ministry, South Korea’s maximum corporate tax rate is the seventh highest among 38 members of the Organisation for Economic Co-operation and Development (OECD).

Looking at the figure of neighboring members, the maximum corporate tax rate in Hong Kong is 16.5%, 17% in Singapore and 20% in Taiwan. 

While most countries have been lowering their maximum corporate tax rates, the previous Moon Jae-in administration raised the maximum by 3% points to 25%.

In addition to South Korea, only five other countries have raised their maximum corporate tax rates, namely Mexico, Slovakia, Iceland, Turkey and Latvia.

Write to Byung-Uk Do at dodo@hankyung.com
Jee Abbey Lee edited this article.