Next Year's National Tax Reduction Rate Expected at 15.9%... "Make Legal Limit Mandatory and Require Deputy Prime Minister to Report Reasons"

[Sejong=Asia Economy Reporter Kim Hyunjung] A revision bill to the National Finance Act has been proposed, mandating compliance with the legally set limit on national tax reduction rates and requiring the Deputy Prime Minister for Economy to report the reasons if the limit is exceeded.

Ryu Seong-geol, a member of the opposition and the Planning and Finance Committee of the National Assembly from the People Power Party, recently proposed a partial amendment to the National Finance Act aimed at requiring the government to report and obtain public approval for reasons when the legally set limit on national tax reduction rates is exceeded.

The amendment to the National Finance Act proposed by Representative Ryu clarifies in law the current regulation under Article 41, Paragraph 3 of the Enforcement Decree of the National Finance Act (Restriction on National Tax Reduction), which states that "the national tax reduction rate must be calculated within the rate obtained by adding 0.5 percentage points to the average reduction rate of the past three years," to ensure better government compliance.

Last year, the legal limit for the national tax reduction rate was 13.9%, exceeding the three-year average (2016?2018) of 13.3% by 0.6 percentage points. According to government estimates, this year the legal limit is expected to be exceeded by 1.8 percentage points, and next year by 1.4 percentage points.

In response, Representative Ryu stated, "Since the Moon Jae-in administration, the legal limit on the national tax reduction rate has been continuously exceeded in budget planning, causing significant strain on national fiscal soundness," adding, "This bill was prepared to consider future generations and to prevent the rapid expansion of national tax reduction amounts due to populist policies of the administration."

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