Minister of Science and ICT: "Expanding 5G Tax Credits Under Discussion... No Budget Support for Deployment"

[Image source=Yonhap News]

[Asia Economy Reporter Seol Gina Cho] Choi Ki-young, Minister of Science and ICT, confirmed on the 28th that he is currently discussing with the Ministry of Economy and Finance and others about expanding the scale of investment tax credits for the construction of 5G infrastructure. However, he clearly stated that the government will not directly support 5G network construction with government funds. The 5G network is expected to serve as a 'data highway,' a core element of the digital New Deal project introduced by the government in the 'post-COVID era.'

Minister Choi responded to a question from independent lawmaker Yang Jeong-sook regarding the 5G tax credit, which is set to expire at the end of this year, during the plenary session of the National Assembly's Science, Technology, Broadcasting and Communications Committee in the afternoon. He said, "Since the tax credit is expiring, we are promoting a new tax credit," and added, "This is a matter that requires consultation with the Ministry of Economy and Finance, so it is currently underway." Currently, the Restriction of Special Taxation Act (RSTA) includes a provision for a tax credit of up to 3% of corporate tax on facility expenses in non-metropolitan areas until the end of this year.

Minister Choi also confirmed the plan by the Ministry of Science and ICT to provide a basic tax reduction of up to 3% of corporate tax on 5G investment amounts from next year, with an additional 1% credit if the company increases employment. He said, "There is such a plan. We are promoting it through inter-ministerial consultations, and a revision bill to the RSTA will be proposed."

In her question, lawmaker Yang mentioned that countries such as the United States, the United Kingdom, Japan, and China are actively creating support funds and providing subsidies for 5G infrastructure construction, implying the need for government-level support.

When asked whether the expanded 65 billion KRW budget for 5G under the Ministry of Science and ICT would be used for nationwide network construction, Minister Choi replied, "It is not direct support for network construction," and added, "We consider that part as policies to attract private investment or provide tax benefits."

He further stated, "Our country already has a relatively well-established 5G infrastructure compared to other countries, and I believe a significant level of construction will be completed within the next 2-3 years. Therefore, there is no particular need to support this with government funds," but added, "I will review the details a bit more."

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