Government to cut partial tax rates

The government plans to introduce emergency measures to diversify exports amid signs of instability in the Japanese and United States economies. In the event of protracted recessions in the two countries, the government would study ways of intervening in the market to boost domestic consumption and prevent the won`s depreciation.

At the same time, it is pursuing the idea of giving tax exemptions on credit card purchases in line with the growing use of the plastic money, and even lowering some tax rates over the long term.

``The economic slowdowns in Japan and the United States could deal a severe blow to Korea`s exports, so we will work to expand export markets in Europe, the Middle East, China and Southeast Asia,`` said Jin Nyum, deputy prime minister and finance and economy minister, in a monthly briefing on economic trends Wednesday.

The government plans to expand outbound shipments to countries where the market share of Korean-made products is less than 1 percent. These countries include France, Austria, Belgium, Canada and Mexico. Moreover, Korea will try to clinch orders for plant construction in the Middle East, whose economy has improved dramatically thanks to higher international oil prices.

Jin said the government would cut some tax rates in the medium and long term in order to ease the burden on taxpayers, noting the desirability of reducing all taxes, including the value-added tax. The Ministry of Finance and Economy plans to work on a tax revision early next month in a meeting of its screening committee for the development of a new tax system. Tax breaks for credit card users will be doubled from this year under a tax revision bill to be submitted to the National Assembly during the preliminary session in April and May.

Kwon Soon-Hwal shkwon@donga.com