February 21, 2007

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  NEWS: Koreans Push for Putting Tax on Credit Cards

  In light of tremendous pressure from citizens, a group of lawmakers have proposed a bill that would oblige the Korean tax agency to accept credit cards as a form of payment. On the government's part, they believe that credit cards are the key to dropping incidences of tax evasion – so much, in fact, that they even proposed a tax deduction to those using plastic. Although some local governments, such as those of Seoul and Pusan accept credit cards, as it stands now, national taxes (which include corporate taxes, customs duties, and national taxes) must be paid in cash.
  
  The main drawback to the proposed legislation is the commission that would need to be paid to credit card companies, even if only half the population paid taxes in credit cards. The nation reaped $138 trillion back from taxes last year – a like haul would result in about a $1 trillion credit card commission being paid out to the respective card companies. On the other hand, the issue of tax evasion is huge in Korea. Many people can't afford to pay their taxes with cash on hand, and, thus, try to dodge the government. It is believed that, with credit cards as a payment option, less of the collections efforts that must now be undertaken would have to be financed.

  
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