Tax Subcommittee's Agreement on Tax Exemption Sales Criteria Stalls... Re-discussion Scheduled This Week

Future United Party Advocates Additional Support and Tax Relief for Daegu and Gyeongbuk

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[Asia Economy Reporter Jang Sehee] The Tax Subcommittee of the National Assembly's Planning and Finance Committee reviewed tax laws related to the response to the novel coronavirus infection (COVID-19), but the process failed due to disagreements between the ruling and opposition parties. The two sides clashed over raising the threshold for simplified taxation and additional special tax reductions for the Daegu and Gyeongbuk regions. The Planning and Finance Committee plans to resume the Tax Subcommittee this week to review the related tax laws, but given the significant differences in positions, there are opinions that discussions at the leadership level, rather than at the standing committee level, are necessary.

On the 15th, Choo Kyung-ho, a member of the United Future Party, said, "If negotiations in the Planning and Finance Committee do not succeed, it may need to be resolved at the leadership level, so the situation is being communicated to the leadership as well."

He added, "The Democratic Party and the government are only considering very limited aspects," and said, "We will also insist on additional tax reductions to support the Daegu and Gyeongbuk regions that have suffered damage." Kim Jung-woo, a member of the Democratic Party of Korea, stated, "The sales threshold should be raised to about 80 million won."

Currently, the ruling and opposition parties have differing positions on reducing the value-added tax (VAT) payment amount for small individual business owners to the level of simplified taxpayers until the end of next year. The United Future Party advocates raising the threshold for small individual business owners to an annual sales amount of 100 million won or less, while the Democratic Party supports raising it to 80 million won or less.

The government proposed an annual sales threshold of 60 million won. According to the government's plan, if the VAT payment amount for small individual business owners with annual sales of 60 million won or less is reduced to the level of simplified taxpayers until the end of next year, it is expected to reduce VAT by an average of about 200,000 to 800,000 won per person for a total of 900,000 people.

Furthermore, since the United Future Party is also demanding special tax reductions for the Daegu and Gyeongbuk regions, negotiations are reportedly facing further difficulties.

A government official said, "To respond quickly to COVID-19, negotiations in the standing committee need to proceed quickly, but the significant differences between the ruling and opposition parties have slowed the process."

Meanwhile, the subcommittee plans to hold a plenary meeting this week to attempt a bipartisan agreement.

This content was produced with the assistance of AI translation services.