Construction Association Requests 3-Year Extension for Private Project Acquisition Tax Reduction

"Urgent Need for Policies Supporting the Revitalization of Private Investment Projects to Boost Economic Recovery"

The Korea Construction Association announced on the 23rd that it has requested the Ministry of the Interior and Safety and the Ministry of Economy and Finance to extend the acquisition tax exemption for private investment projects, which is set to expire at the end of this year, for an additional three years.

The acquisition tax exemption for private investment projects was established to revitalize private investment projects and stimulate economic recovery when the domestic economy was in recession due to the global economic slowdown and the MERS outbreak in 2015.

From 2016 to 2018, acquisition tax for private investment projects was exempted for three years, and it was extended once more to exempt the tax for two years from 2019 to 2020, with a 50% reduction in acquisition tax in 2021. This exemption is scheduled to end at the end of this year.

The association stated, "In the economic crisis caused by COVID-19, expanding private investment must be accompanied to enable a rapid economic recovery," and emphasized that "tax support for private investment projects must continue."

In particular, the association pointed out, "With the abundant liquidity in the market due to low interest rates flowing into asset markets such as real estate and stocks, concerns about asset market bubbles are increasing," and stressed that "revitalizing private investment projects is an effective means to attract market liquidity into industrial production investment, thereby contributing to domestic demand recovery and job creation, and ultimately the recovery of the real economy."

Furthermore, the association added that private investment projects not only enhance economic vitality but also alleviate the government's fiscal burden and increase public safety and social benefits by enabling the private sector to supply essential social infrastructure in a timely manner. "Compared to fiscal projects, private investment projects have been shown to reduce construction costs and shorten construction periods by as much as 40%," the association concluded.

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