Annual Yield of Around 3%: Promotion of the 'National Participation New Deal Fund' Establishment

[Asia Economy Reporter Kwangho Lee] The government is pushing to establish a 'National Participation New Deal Fund' that can yield an annual return of around 3%.

On the 2nd, according to the Democratic Party of Korea and the government, the ruling party and government plan to announce this month their concept for launching a New Deal Fund aimed at raising resources for the Korean New Deal and increasing national income.

Since Rep. Kwangjae Lee, chair of the Digital New Deal subcommittee of the Democratic Party's K-New Deal Committee, proposed the National Participation New Deal Fund, related ministries such as the Ministry of Economy and Finance and the Financial Services Commission have been gradually concretizing the plan.

The ruling party and government are conducting behind-the-scenes coordination with private companies and financial institutions for the launch of the New Deal Fund.

The New Deal Fund envisioned by the ruling party and government is a method where funds for each project under the Korean New Deal, such as the Digital New Deal and Green New Deal, are sold through financial companies, allowing any citizen to invest.

The ruling party and government plan to provide not only a basic return of around 3% on the New Deal Fund but also tax benefits to enable higher returns, and they are also considering allowing additional profits if the projects invested in by the fund succeed.

The government included in this year's tax law revision bill a provision to grant dividend income separate taxation (14% withholding tax) benefits up to 100 million KRW for investors in Korean New Deal-related public infrastructure funds, while the Democratic Party is considering applying a low tax rate of around 5% up to 300 million KRW for the National Participation New Deal Fund.

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