[Editorial] Tax reform to put heavy burden on grassroots

The proposed taxation reform package revealed by the government underlines the increased tax revenue based on administrative expediency, while neglecting the reduction of tax burden on those in the low-income bracket. In particular, there are no provisions in the projected tax reform bills for achieving specific policy goals such as the attainment of export targets and stabilization of the livelihood of the underprivileged.

Specifically, raising indirect tax rates is blatant proof of neglecting the plight of those in low-income brackets. The hikes in tax rates for tobacco and liquefied gas (LPG) will be disadvantageous to the underprivileged, as all people have to bear the same level of the tax burden. This is clear when it is

considered that LPG is not used by the deluxe sedans but by average people.

Raising our concern is the fact that the government has taken few steps toward closing the gap of income between the rich and the poor, a disparity that has become wider since the nation underwent the foreign exchange liquidity crunch.

The government`s financial supports for low-income earners have not been continuously and systematically carried out, but rather have ended up as one-time events. To our dismay, the related budget outlays have been slashed.

Although the government has lowered some tax rates for these disadvantaged wage earners, this is still unfair, compared with the tax burden born by the high-income independent enterprisers.

As this paper often pointed out, the retention of the objective tax raises doubts about the government`s will to conduct reform. The abolition of such objective taxes as the education tax is one of the government` commitments to the people, but the related ministry announced a plan to keep intact the education tax for the coming five years. The extension of the objective taxes without due scrutiny, whether the tax money was spent properly or not, is a mere manifestation of the administration`s expedient taxation practice and self-centered egoism among the ministries.

Drawing special attention is the fact that there are no traits in the proposed tax reforms for enhancing willingness of labor and production, an imperative task for strengthening the nation`s international competitiveness. Despite the fact that research and development (R&D) is the lifeline for our posterity to survive, investments in the field have been disappointingly decreased. For instance, although the government pronounced a policy to encourage venture businesses, in actuality, the budget for this area was slashed.

The reform in the tax system needs to be realized on the premise that financial demand is met, and to reduce the financial burden on the lower class. These particular problems should be addressed during the course of consultations between the administration and the ruling party.