Ruling Party Pushes Ahead with Disaster Relief Fund and Virtual Asset Tax Deferral

Despite Ministry of Economy and Finance Opposition, Was Voter Sentiment More Important?
One-Year Postponement of Virtual Asset Taxation Effectively Confirmed as Party Policy
Additional Disaster Relief Payments Also Reflect Lee Jae-myung's Firm Determination

[Asia Economy Reporter Oh Ju-yeon] With the presidential election just over three months away, tensions are escalating between the ruling party, which is toying with populist policies, and the government, which is trying to protect the treasury. The Democratic Party of Korea virtually confirmed its party stance on the virtual asset tax deferral plan, which the Ministry of Economy and Finance opposes, on the 3rd. It also made clear its intention to proceed with the additional disaster relief payment plan as per presidential candidate Lee Jae-myung's will, despite Prime Minister Kim Boo-kyum expressing reluctance due to lack of fiscal capacity.

The Democratic Party confirmed at a policy forum held that day the plan to defer the virtual asset tax, originally scheduled to be implemented from January next year, by one year to apply from January 2023. Although the forum was hosted by the think tank Minjoo Research Institute in form, it was essentially a venue to share the virtually confirmed party stance.

No Woong-rae, head of the Minjoo Research Institute, said in a call, "We will discuss deferring the government's taxation direction," adding, "This forum is intended to change the Ministry of Economy and Finance's policy stance."

While the tax deferral is criticized as a vote-catching move targeting the 2030 generation ahead of the March presidential election next year, the Democratic Party expressed a strong will to push it through, saying it is to ensure ‘fairness’ with other financial assets. However, Deputy Prime Minister and Minister of Economy and Finance Hong Nam-ki maintained his previous position at last month's National Assembly audit, stating "there is no problem with taxation next year," and the Ministry of Economy and Finance still holds this stance.

The ruling party and government also clashed strongly over the additional disaster relief payment plan that day. The party officially began discussing the plan to provide an additional 300,000 to 500,000 won per person in disaster relief funds, which candidate Lee proposed as a pledge. In response, Prime Minister Kim appeared on the radio that morning and opposed the plan, saying, "There is no fiscal capacity immediately." However, after the first meeting of the Democratic Party's election committee that morning, senior party spokesperson Ko Yong-jin disregarded this and said, "The candidate's position on disaster relief funds is clear and his will is strong," adding, "He mentioned the necessity again today and hopes it will definitely be processed." Candidate Lee also reiterated at the meeting, "I ask the election committee to actively push forward the issue of additional disaster relief support," directly confronting the government's opposition.

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