South Korea planned to overhaul the system of tax exemption and reduction to finance fiscal spending on welfare programs, the Finance Ministry said Tuesday.

Temporary tax exemption and reduction will be expired"in principle" to raise 15 trillion won (13.5 billion U.S. dollars) necessary for five major policy agenda, including customized welfare policy, set by the new administration under President Park Geun-hye over the next five years, according to the Ministry of Strategy and Finance.

In 2013 alone, around 1.8 trillion to 2 trillion won will be needed to meet the fiscal spending, which will be raised through the overhaul of tax exemption and reduction.

The Finance Ministry will offer the basic principle on fiscal expenditure to other ministries and agencies, which in turn should submit the plan of tax exemption and reduction to the Finance Ministry by the end of April.