As the government pushes to double the education tax imposed on large financial and insurance companies, the insurance sector plans to convey its request to authorities for necessary adjustments in tax rates and tax base thresholds.
According to the insurance industry on the 10th, the Life and Non-Life Insurance Association is collecting opinions from its 41 member companies regarding the increase in the education tax. A consensus is expected to be reached this week and submitted to the Ministry of Economy and Finance. The consensus is anticipated to include adjustments to tax base thresholds and tax rates.
The education tax burden on five major non-life insurance companies (Samsung Fire & Marine Insurance, Hyundai Marine & Fire Insurance, DB Insurance, KB Insurance, and Meritz Fire & Marine Insurance) is reported to be 200 billion won, while six life insurance companies including Samsung Life Insurance, Hanwha Life, and Kyobo Life Insurance are estimated to pay 150 billion won. If the education tax doubles, it will increase to a total of 700 billion won.
Earlier, the government announced a tax reform plan that includes doubling the education tax rate from the current 0.5% to 1% for financial and insurance companies with revenue exceeding 1 trillion won starting next year. Major financial firms have been experiencing explosive growth recently, and the education tax rate has not been adjusted since it was introduced in 1981.