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South Korean finance ministry proposes corporate tax cut PDF Print E-mail
Wednesday, 12 March 2008

Agence France-Presse . Seoul

South Korea’s finance ministry on Monday proposed a three-per cent cut in corporate taxes and urged increased state spending on infrastructure to help revitalise the country’s economy.

In a report to President Lee Byung-Bak, the finance ministry called for further deregulation to boost domestic demand. It also promised to further slash corporate taxes.

It said South Korea could post a current account deficit of seven billion dollars this year due to global financial jitters and soaring prices of oil and other raw materials.

Resource-poor South Korea, the world’s 13th largest economy, posted a current account surplus of six billion dollars last year. But the Bank of Korea expects a current account deficit of three billion dollars this year after it widened to an 11-year high of 2.6 billion dollars in January.

The cabinet has already endorsed an expansion of tax favours to companies, a freeze in power and public utility rates and lower education expenses. Lee, the country’s first president from a business background, presented a series of pro-business policies including deregulation, privatisation and tax cuts.

His key ‘747’ pledge is to raise growth to seven per cent in his five-year term, lay the foundations to raise per-capita income to 40,000 dollars within a decade and make South Korea the world’s seventh largest economy.

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