Business Community: "Legislation Must Start with Regulatory Improvement and Investment Promotion Pledges"

Appeal for Strengthening Tax Support for New Technologies and New Industries

[Asia Economy Reporter Ki-min Lee] The business community has appealed that once the 21st National Assembly convenes, it should first legislate regulatory improvements and investment promotion pledges aimed at revitalizing the economy. This is based on the premise that the National Assembly should support companies in enduring management crises and maintaining employment as much as possible until the global COVID-19 pandemic subsides.

In particular, the bills that the business community prioritizes most include the ruling party’s 21st general election pledges such as 'Improvement of regulations on new technologies and new industries and strengthening of tax support' and the 'Special Act on Innovation Growth and Competitiveness Enhancement of Manufacturing Industry (tentative name)'. The Democratic Party’s pledges related to new technologies and new industries include ▲ shifting to a negative regulation system for new industries and new technologies ▲ strengthening tax support for research and development (R&D) and facility investment in new technologies and new industries ▲ a roadmap related to improving regulations on new industries such as financial, tax, and patent support for companies approved under the regulatory sandbox and promoting investment.

Additionally, the Democratic Party has pledged to pass the Special Act on Manufacturing Innovation to strengthen smart manufacturing innovation capabilities through the creation of smart industrial complexes, AI- and 5G-based smart factories, and smart manufacturing clusters. In this context, the Future Korea Party’s pledges, such as support for tax benefits on corporate facility and R&D investments (amendment to the Restriction of Special Taxation Act), are also considered pledges that must be addressed.

There have also been consistent calls to urgently address labor regulation improvements and corporate tax reductions that the 20th National Assembly failed to handle. Although these pledges differ from the Democratic Party’s policies such as income-led growth, the business community argues that rapid consensus in the National Assembly is necessary given the urgent economic situation.

The business community views that if it is difficult to implement the flexible working system or minimum wage reform advocated by the opposition, support for easing corporate management burdens due to reduced working hours pledged by the Democratic Party, as well as support for labor-related corporate issues such as helping small and medium-sized enterprises with recruitment difficulties, are absolutely necessary. Some in the business community also believe that revising the Corporate Tax Act, a pledge of the Future Korea Party, is needed to activate corporate investment.

The Future Korea Party’s pledge to amend the Corporate Tax Act includes simplifying the current four-tier corporate tax brackets into two tiers and reducing corporate tax rates by about 2-5% for each bracket.

Economic organization officials unanimously urged, "After COVID-19, to prepare for a competitive environment shaped by protectionism and deglobalization, fundamental economic structural strengthening legislation such as regulatory innovation for new industries and advancement of labor systems must be supported to enhance corporate competitiveness and create many quality jobs."

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