South Korea's finance ministry announced on Thursday that it will slash income and corporate taxes in a bid to boost corporate investment and ease the tax burden on regular citizens who are struggling with rising inflation.

According to the Ministry of Economy and Finance, the highest corporation tax rate will be reduced from the present 25% to 22% for tax bases over 300 billion won (228.8 million US dollars). 

The previous government increased the highest rate by 3 percentage points to 25% in 2017, which was the first increase in 28 years. To lessen the tax burden on small businesses, the tax base for the 10-percent minimum tax rate among small firms would be increased from the existing 200 million won (152,560 dollars) to 500 million won (381,390 dollars).

For the first time in 15 years, income taxes will be reduced for people making less than 50 million won ($38,140) each year in order to assist middle-class and working-class families who are struggling to keep up with the rising cost of living.

As home values rose in recent years amidst historically low borrowing costs, comprehensive real estate holding taxes will be reduced by reducing the tax rate and increasing the tax base.
Prior to September 2, the ministry intended to present the tax reform measure to parliament for approval.

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