Rep. Oh Ki-hyung of the ruling Democratic Party said there is no need to distinguish between owner-occupiers and non-resident owners of a single home under the government's proposed overhaul of the comprehensive real estate holding tax, arguing that the basic deduction should apply equally to both. Oh also opposed a government tax bill that would raise the cap on the annual increase in the tax burden to 200% from 150%, saying it should be kept as it is.
Oh, the ruling party's chief negotiator on the National Assembly's finance and economic planning committee, appeared on KBS's "Jeongkyeok Sisa" on the 25th to explain the Democratic Party's approach to the government's tax revision plans.
On the basic deduction for owners of a single home, Oh said the underlying view is that there is no need to distinguish between those who live in the home and those who do not. "For a single home, whether the owner lives there should be treated the same as far as possible," Oh said. The remarks amounted to calling for a revision of the government's plan to set different deduction amounts depending on whether the owner lives in the home.
Oh cited the 1.2 billion won deduction limit proposed for single-home owners and the 1.4 billion won limit proposed for owner-occupiers of a single home. "The question is whether to unify it at 1.2 billion won or instead unify it at 1.4 billion won," Oh said, noting that several options are possible. Oh added that no final plan has been decided, leaving open the possibility that the government and the party will fine-tune the details.
Oh also made clear opposition to raising the cap on the tax burden. The government plan would raise the cap on the tax burden to 200% from 150% relative to the previous year, but Oh said, "Aren't abrupt changes something that should be exercised with more restraint in terms of predictability?" and called for keeping it as it is.
Oh also expressed a negative view of raising the fair market value ratio. He pointed out that raising the fair market value ratio on top of rising official assessed prices could make taxpayers' burden excessive. He also noted that the fair market value ratio is a matter that can be adjusted through a presidential decree rather than through a revision of the law.
On the capital gains tax, by contrast, Oh largely agreed with the aim of the government's plan to reduce the special deduction for long-term holding. Citing a case in which a home bought for 1.6 billion won became worth 5.6 billion won a decade later, producing a capital gain of 4 billion won, Oh asked, "For this 4 billion won capital gain, how far is it right to levy tax?" The point was that a debate on fair taxation is needed over whether the existing special long-term-holding deduction of up to 80% is appropriate.
Oh said, however, that a transition period is needed given the market shock from changing the system and the trust of existing taxpayers. A compromise should be found, he said, that takes into account "the trust extended within the reasonable choices and judgments people had made on their own based on earlier expectations."
Meanwhile, Oh took a cautious stance on the push for a so-called "prosecution withdrawal" special counsel. Responding to arguments within the party that the related special counsel should be handled during the regular parliamentary session in September, Oh pushed back, saying it requires "more caution." He stressed that "public consent is the most important thing" and that "it can only be considered once social awareness has accumulated and there has been sufficient persuasion." On the analysis that recent cases such as that of former Rep. Roh Woong-rae, who was acquitted at both the first and second trials, had influenced the push for a special counsel, Oh set out the principle that a national consensus should take priority over any specific judgment.
