South Korea is mapping out the details of a special tax that would help finance the massive costs of potential unification with North Korea, a senior official has said.
Talk of a unification tax in the South has triggered angry protests from North Korea, which has long suspected that Seoul could seek to absorb its impoverished northern neighbor.
There are no clear signs that the two Koreas, divided for nearly six decades, could be reunited anytime soon, especially amid lingering tensions over Pyongyang's two deadly attacks on the South last year.
Still, Seoul has been working on the blueprint since last year when President Lee Myung-bak first floated the idea of using taxpayers' money to cushion the cost of unification, which analysts say would be astronomical.
Lee has since said that South Korea has come closer to unification with North Korea and that the event would come unexpectedly, stressing unification is not a matter of choice, but a must.
"We are considering using the tax" to partly fund unification, but "we are working on a plan in a way that would not be a big burden on working-class citizens," the senior official said, without elaborating.
Another official handling the issue said South Korea is eyeing setting aside more than 12 trillion won (US$11 billion) to cover potential unification.
The two officials made the comments in a meeting with reporters near the border with North Korea on Friday. They spoke on the condition of anonymity, citing the issue's sensitivity.
Experts estimate it could cost South Korea more than US$1 trillion to unify with the North, whose per capita income is about 5 percent the size of the Asia's fourth-largest economy.
Earlier this year, a dozen ruling and opposition lawmakers introduced a bill that would make it legal for South Korean taxpayers to shoulder the cost. No major progress has since been made yet.
On Saturday, the North's official Korean Central News Agency blasted Seoul's proposed unification tax, denouncing it as a "war tax" to realize what it claims is Seoul's plan to invade the North.
North Korea has frequently accused South Korea and the United States of plotting to invade the North, a charge that Seoul and Washington have repeatedly denied.
The U.S. keeps some 28,500 troops in South Korea as a legacy of the 1950-53 Korean War, which ended in a cease-fire, not a peace treaty, leaving the two Koreas technically still at war.