A Result of Government's Tax Policy
The Nihon Keizai Shimbun recently analyzed 57,000 companies’ corporate tax burdens for 2018 to 2020 by dividing their corporate taxes by their pre-tax profits and announced on May 9 that Samsung Electronics’ burden is 27.8 percent whereas the average of Google, Apple, Facebook and Amazon is 15.4 percent and the average of the 57,000 is 25.1 percent.
According to the analysis, Toyota’s burden is 24.8 percent and those of Siemens and Nestlé are 24.7 percent and 23.8 percent, respectively.
Google’s burden used to exceed 53 percent in 2017, when its burden was almost twice that of Samsung Electronics. However, things completely changed in just three years with the South Korean government raising its corporate tax rate unlike many other governments.
In the United States, the effective corporate tax rate dropped from 40 percent or so in 2010 to 25.77 percent in 2020. Japan’s effective corporate tax rate fell about 10 percentage points to 29.74 percent in that period. That of the United Kingdom stands at 19 percent and both Canada and France are lowering their effective corporate tax rates, too.
According to People Power Party lawmaker Yu Kyong-jun, corporate taxes accounted for 15.7 percent of South Korea’s tax revenue last year whereas the OECD average was 10 percent. The same ratios of the United States and Germany stood at 4.1 percent and 5.6 percent, respectively.