SEOUL, Oct. 5 (Korea Bizwire) – A spike in local cigarette taxes is expected to push up the amount of next year’s tobacco tax revenue on par with what the government receives from salaried workers, a local civic group claimed Monday.
According to the Korea Taxpayers Association, cigarette tax revenue is estimated to top 12.6 trillion won (US$10.7 billion) in 2016. Seoul marked up taxes levied on cigarettes by 2,000 won, starting in January, citing the need to push people to quit smoking.
The estimate is only slightly smaller than the 12.7 trillion won in income taxes imposed on people who make less than 100 million won per year, the group said, adding 98 percent of all salaried employees, or some 15.77 million, make less than 100 million won annually.
Next year’s cigarette tax revenue is actually larger than what the government will get from taxes on financial assets earnings, which includes dividend payments and interest-related profits that reached 7.6 trillion won for the 2013 tax year, it said.
“Slapping stiff cigarette taxes, which impact the lives of ordinary people, is not a fair way to manage a country’s fiscal policy,” the group argued.
Many local civic groups have expressed concerns about high cigarette taxes, urging the government to seek other ways to tackle the fiscal imbalance such as raising dues collected from big companies.