The government will redirect about 1.8 trillion won ($1.3 billion) in education tax revenue that has been distributed each year to elementary, middle and high schools, channeling it instead into universities and lifelong education starting next year.
The Ministry of Education gave public notice of proposed amendments to the Special Account for Higher and Lifelong Education Support Act and the Special Account for Early Childhood Education and Care Act on the 24th.
The education tax is levied on four sources: the earnings of financial and insurance companies, the individual consumption tax, the fuel tax and the liquor tax. Of these, the 2 trillion won in education tax collected from financial and insurance companies is allocated entirely to the higher education fund. For the education tax levied on the individual consumption tax, the transportation, energy and environment tax, and the liquor tax, 60% goes to the early childhood fund and 40% to the local education grant.
Based on this year's budget, about 2.6 trillion won in education tax was spent on early childhood education and care, while about 1.76 trillion won went to the local education grant.
The amendments center on redirecting the entire 40% share previously funneled into the local education grant to the higher education fund. The 60% of education tax levied on the individual consumption tax, the transportation, energy and environment tax, and the liquor tax will remain in the early childhood fund, while the remaining 40% will be used solely for universities and lifelong education instead of being distributed to elementary, middle and high schools.
The amendments would take effect immediately upon promulgation. Given the usual timing for the National Assembly to pass the budget, they are expected to clear a plenary session late this year.
