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S. Korea's individual tax, insurance burden jumps to 26 pct of GDP

All News 12:00 December 10, 2017

SEOUL, Dec. 10 (Yonhap) -- South Korea's tax and insurance burden jumped to 26 percent of the country's gross domestic product last year due to the aging population and expanded welfare policies.

South Korea's individual tax and insurance premium burden grew 1.1 percent in 2018, higher than the average growth rate of 0.3 percent for member states of the Organization for Economic Cooperation and Development (OECD), according to the Paris-based institute.

Experts say slowing productivity and thinning of people in the working age, and rise in spending on welfare policies pushed up burden numbers.

They expect the tax and insurance burden for South Koreans to continue rising as the government plans to spend more on welfare programs and to increase jobs in the public sector.

Last year, the corresponding figures were at 26 percent in the United States, following Denmark's 45.9 percent, Norway's 38 percent and Germany's 37.6 percent.

As South Korea's individual tax and insurance burden still remains lower than the average of 34.3 percent for OECD member states as a whole, the country's ratio appears to have a room to rise further, observers said.

The level of the burden needs to be raised to ensure better welfare programs, but the pace of growth should be slowed, they said.

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