[Exclusive] Democratic Party to Propose Party Resolution on 'Mutual Growth Fund' Before Lunar New Year... Increasing Tax Credit to 15%

[Image source=Yonhap News]

[Asia Economy Reporter Park Cheol-eung] The Democratic Party of Korea plans to adopt a bill as a party stance before the Lunar New Year holiday to raise funds for overcoming COVID-19. The bill aims to strengthen incentives for voluntary participation by increasing the tax credit benefits for companies that donate or contribute to the fund up to 15%. Additionally, it focuses on supporting those severely affected, such as self-employed individuals, by utilizing reserves from the Bank of Korea, various other funds, and the recovery of public funds from the International Monetary Fund (IMF) crisis period.

Yang Kyung-sook, a member of the Democratic Party's 'Post-COVID Inequality Resolution Task Force (TF),' said in a phone interview with Asia Economy on the 4th, "We are preparing a bill for the National Crisis Overcoming Coexistence Fund, and after future TF meetings and party-government consultations, it will be adopted as a party stance." She added, "We plan to finalize it as soon as possible, and it should be possible to propose the bill before the Lunar New Year holiday."

The Democratic Party emphasizes voluntariness as a fundamental principle. Instead, it aims to maximize private sector participation by providing sufficient incentives. Yang said, "The Rural and Fishing Village Coexistence Cooperation Fund offers a 10% tax credit, but to create a boom in contributions or donations, it needs to be higher than that level." She continued, "We are targeting 15%, and considering other incentives, it is not an exaggeration to say that contributors can effectively get back as much as they put in."

In the public sector, funds excluding social security funds, reserves from the Bank of Korea, and recovered public funds are expected to be utilized. Yang stated, "Out of the 168 trillion won in public funds disbursed during the IMF period, 52 trillion won has not yet been recovered, but we can actively recover this and put it into the coexistence fund." She added, "The Bank of Korea reserves are currently set at 30% of earnings, but we are discussing temporarily lowering this to 10%, the level before 2011, for utilization." She further noted, "We are in close consultation with the government side, and most agree with this."

Lee Yong-woo, also a member of the TF, announced in a press release the day before that he will propose the Social Solidarity Fund Act and amendments to the National Tax Act and Corporate Tax Act, indicating that these will be discussed together.

The government has proposed using the world surplus (net surplus combining tax revenue excess and leftover budget), contributions from other funds, voluntary donations or contributions from the private sector, and management income from unclaimed assets such as dormant deposits as financial resources.

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