June 28, 2022

South Korean President Proposes “Unification” Tax

South Korean President Lee Myung-bak

South Korean President Lee Myung-bak

In a first for any South Korean leader, President Lee Myung-bak has proposed the implementation of a ‘unification tax’ intended to pay for expenses that will arise in the event of reunification with the North. Although all previous leaders of South Korea have expressed support for reunification, only Lee has suggested such a tax.

The relationship between the two Koreas is still strained based on Seoul’s accusation that the North had torpedoed a South Korean warship killing 46 sailors in March.

The recent tension has further dampened the prospect of reunification any time soon.

However, Lee, upon the commemoration of 65 years of Korean liberation from Japanese rule, assured the public that “Reunification will definitely come.”

Reunification of the impoverished North with the economically strong South, should it occur, may cost anywhere from a few hundred billion dollars to a whopping $1 trillion dollars.

Officials are concerned about the possibility that  Kim Jong-il’s death might occur before his successor is ready to take control. The health of the North Korean leader is steadily declining. Yet his son, Kim Jong-un is still being groomed for the leadership role and may not be ready to assume control..

Lee has not suggested that the proposed tax was related to the health of the North Korean leader. However, analysts are concerned that the North will interpret a unification tax to mean that Seoul is preparing for a sudden collapse of the Pyongyang government.

“President Lee should have first laid the groundwork for unification before proposing the tax” according to Yang Moo-jin, a researcher at the University of North Korean Studies located in Seoul.

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