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The Korea Certified Tax Accountants Association, an organization representing some 18,000 certified tax accountants nationwide, has praised the government's 2026 tax reform proposals announced on the 3rd for restructuring real estate taxation around actual residency.
The association stated, "We highly evaluate the government's strong commitment to tax reform, which includes overhauling the previously irrational real estate tax system to strip away excessive tax benefits, comprehensively shifting toward a 'national housing right protection system' centered on actual residency, and pursuing the reorganization of nearly half of the tax expenditure items out of a total of 241 tax exemption and reduction systems."
However, the association expressed regret that the proposals failed to properly reflect "tax systems desired by the public," such as completely exempting single-generation-one-home owners residing in their properties from the comprehensive real estate holding tax, expanding the basic inheritance tax deduction in consideration of inflation and rising housing prices, easing burdens for small and medium-sized enterprises through medical, education, and monthly rent deductions, and introducing an inflation-indexed tax system to prevent tax burdens from increasing due to inflation.
In particular, regarding the government's projection that the tax reform will generate an increase of 3.4 trillion won in tax revenue annually, the association expressed concern that rapid changes to real estate taxes such as holding taxes and capital gains taxes, along with the stripping of benefits, will have a considerable impact on general public livelihood and cause the tax burden on ordinary citizens to rise significantly higher than estimated.
Meanwhile, the association welcomed the decision to lower the withholding tax rate from 3% to 2% for vulnerable platform workers and personal service providers totaling about 5 million people, including delivery workers and couriers, noting that this will prevent excessive tax withholding burdens.
The association requested that before the tax reform proposals take effect, the government establish filing infrastructures, sufficiently distribute comprehensive guides and preliminary explanatory materials that clearly outline application criteria by year, and thoroughly incorporate opinions from the public and experts during the National Assembly's tax law review process for faithful legislation.
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