Icheon, Suwon, Yongin, Hwaseong, and Pyeongtaek See Local Income Tax Plunge Up to 82% Due to Semiconductor Slump

[Asia Economy (Suwon) = Reporter Lee Young-gyu] Basic local governments in Gyeonggi-do, including Icheon, Suwon, Hwaseong, Yongin, and Pyeongtaek, are expected to see a decrease of about 30% in corporate local income tax this year due to the semiconductor industry's downturn.

Gyeonggi-do announced on the 24th that, as a result of operating the corporate local income tax filing period for the 2019 fiscal year corporate income, 1.5455 trillion won was reported, which is 95.42% of the collection target amount of 1.6197 trillion won.

This represents a decrease of 640.1 billion won (29.29%) compared to the 2.1856 trillion won in corporate income tax for the 2018 fiscal year. The province cited poor corporate performance due to the decline in semiconductor prices last year as the main reason for the decrease in local income tax.

In Icheon City, where SK Hynix is located, the reported tax amount decreased by 82.17%, from 355.5 billion won last year to 63.4 billion won this year. Additionally, cities with a significant semiconductor business presence such as Suwon (43.73%), Hwaseong (32.42%), Yongin (28.20%), and Pyeongtaek (28.42%) also showed double-digit decreases.

Corporate local income tax is a city or county tax paid by corporations liable for corporate tax to the relevant local government by the end of April the following year, accounting for a large portion of local tax revenue.

This year, to overcome the damage caused by COVID-19, the payment deadline was extended for corporations facing business difficulties, with 272 corporations applying for an extension of 7.1 billion won in payments, extended up to a maximum of six months.

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