Lee Yong-seop Proposes Corporate Tax Reduction for High-Tech Companies in Free Economic Zone (Comprehensive)

Lee Yong-seop "GGM, Ready to Shift Business Structure to Eco-friendly Autonomous Vehicles Anytime After Demand Survey"
Government "Additional Designation of Free Economic Zones Focused on AI, Hydrogen, Drones, and Other New Industries... Contributing to GVC Reorganization"

Lee Yong-seop, Mayor of Gwangju Metropolitan City. (Photo by Gwangju Metropolitan City)

[Asia Economy Reporter Moon Chaeseok] "It was suggested that for advanced industry companies entering economic free zones, corporate tax reductions should be introduced without distinguishing between domestic and foreign capital, within a reasonable scope."

Lee Yong-seop, Mayor of Gwangju, said this on the 3rd at a briefing of the '116th Economic Free Zone Committee' held at the Government Sejong Complex. He emphasized the need for corporate tax cuts to revitalize the 4th industrial revolution during the Economic Free Zone Committee meeting.

The mayor stated, "Last year, corporate tax reductions for foreign-invested companies were abolished because they did not comply with international norms such as the World Trade Organization (WTO), but in a closed Economic Free Zone Committee meeting, the opinion was presented that corporate tax reductions should be introduced without distinguishing between domestic and foreign capital, and some committee members agreed."

He added, "Mayors Song Cheol-ho of Ulsan and Im Byung-taek of Siheung, along with our position, will propose a plan to grant tax reductions to advanced industries entering economic free zones regardless of domestic or foreign status, so we hope central government ministries will review this positively."

He also explained why Gwangju Global Motors (GGM), a result of the 'Gwangju-type job' project, secured a business structure focused on compact cars and internal combustion engine vehicles rather than eco-friendly autonomous vehicles.

The mayor said, "Currently, the profitability of eco-friendly autonomous vehicles is low, but we will prepare to switch to eco-friendly vehicles anytime by predicting demand changes," adding, "Under the three main concepts of 'ecologization, digitalization, and flexibility,' we will enable a transition to eco-friendly autonomous vehicles."

Mayor Song emphasized the synergy effects between hydrogen industry facilities and nuclear decommissioning research facilities entering Ulsan's economic free zone.

Mayor Song explained, "There can be synergy between the two, but no conflicting issues," and added, "The nuclear decommissioning industry can develop alongside hydrogen, a new green energy, and can be sufficiently developed around a separate cluster in Ulsan."

The Ministry of Trade, Industry and Energy responded "Yes" to the criticism questioning the effectiveness of newly designating economic free zones amid the global trend of 'economic bloc formation' and the reorganization of the global value chain (GVC).

Ahn Seong-il, Head of the Economic Free Zone Planning Division at the Ministry of Trade, Industry and Energy, said, "Economic free zones have recently strengthened investment attraction activities and restructured underperforming organizations, showing about 10% growth in the number of resident companies and sales," adding, "Economic free zones will play an important role in the GVC."

Ahn said, "The economic free zones applied for by each region were designated mainly for new industries such as artificial intelligence (AI), hydrogen, and land/sea/air unmanned mobility," and added, "Since November 2018, these economic free zones have been developed as 'innovation-driven global new industry hubs' as stated in the '2nd Basic Plan for Economic Free Zones,' contributing to investment attraction and national industrial policy development."

On this day, the Economic Free Zone Committee reviewed and approved the addition of Gwangju, Ulsan, and Hwanghae (Siheung, Gyeonggi-do) economic free zones and the cancellation of the designation of the Yulchon 3 Industrial Complex in the Gwangyang Bay economic free zone.

Gwangju will focus on AI, Ulsan on hydrogen, and Siheung on unmanned mobility (such as drones). It is expected to generate an economic effect of about 40 trillion won and create approximately 129,000 jobs.

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