S. Korea's tax burden ratio drops for 2nd year in 2014
SEOUL, April 26 (Yonhap) -- South Korea's tax burden ratio fell for the second consecutive year in 2014, hovering well below the average for member states of the Organization for Economic Cooperation and Development (OECD), data showed Sunday.
The nation's tax burden ratio, or the percentage of total national and local taxes to current gross domestic product, came to 17.8 percent last year, down 0.1 percentage point from the previous year, according to the data by the finance ministry, the central bank and provincial governments.
It marks the second consecutive year of decline. The ratio declined to 17.9 percent in 2013 from 18.4 percent a year earlier.
In its mid-term fiscal management plan, the finance ministry has predicted that the nation's tax burden ratio will likely drop further to 17.5 percent this year.
The ministry projects the ratio to increase to 17.9 percent by 2018 if the nation's tax revenue increases on an economic recovery and the regularization of the so-called underground economy.
According to the data, South Korea's tax burden ratio hovers far below the average 25.8 percent for the OECD members, with the comparable figure for Sweden and other North European nations far exceeding 30 percent.
Private economists said that South Korea should increase its tax burden ratio to meet growing demand for increased tax spending down the road.
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