A new report shows that the reunification of the two Koreas could lead to a 10-fold surge in government expenditures for the needy.
The Korea Development Institute said that, in the event of reunification, the number of people living under the subsistence level would jump from the current 1.5 million to up to 20 million.
This translates into a 10-fold increase in government spending on welfare for the needy, based on South Korea's current welfare policy, with health care expenditures increasing by the largest margin.
To raise the revenue to cover the costs, the institute said the government would need to increase the individual income tax rate and value added tax.
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