Government Eases 'Metropolitan Transportation Facility Charges' for Housing Remodeling

Resolution of the 5th Contribution Management Deliberation Committee

Calculation Excluding Existing Building Area
Increase in Base Amount for Disability Employment Contribution

Ando-geol, Vice Minister of Strategy and Finance, presides over the 5th Burden Fund Management Deliberation Committee and delivers opening remarks at the Government Seoul Office in Gwanghwamun, Seoul, on the 28th. (Photo by Ministry of Strategy and Finance)

[Sejong=Asia Economy Reporter Moon Chaeseok] The government has decided to ease the metropolitan transportation facility charges imposed on housing remodeling projects.

On the 28th, the Ministry of Economy and Finance held the 5th Charge Operation Deliberation Committee meeting at the Government Seoul Office, chaired by Deputy Minister Ando Geol, and reviewed and approved eight agenda items including this matter.

Considering fairness with similar cases such as redevelopment and reconstruction projects, the government decided to revise the enforcement decree so that when calculating the metropolitan transportation facility charges for remodeling projects, the "total floor area of the previous building," which does not generate new metropolitan transportation demand, will be excluded. The charge is calculated by multiplying the "standard construction cost per 1㎡" by the "imposition rate" and the "building total floor area," then subtracting the "deduction amount." Only the expanded area excluding the previous building area will be included in the "building total floor area."

It was also decided to raise the base amount for calculating the disability employment charge that employers must pay according to the shortfall in the mandatory employment of persons with disabilities. According to the Act on Promotion of Employment of Persons with Disabilities, the current base amount for the charge, which is 60% of this year's minimum wage, will be revised in line with next year's minimum wage increase rate, raising it from the existing 1,094,000 KRW to 1,149,000 KRW.

The deduction system for the "foreign currency soundness charge" imposed on financial institutions holding non-deposit foreign currency liabilities with a remaining maturity of one year or less will also be restructured. To promote foreign exchange transactions and diversify settlement currencies, in the case of the KRW/CNY deduction system, preferential treatment will be given to customer transaction amounts based on actual demand during deductions, and the deduction for CNY liabilities will be limited to clearing banks that directly supply liquidity to the market. The deduction limit will be adjusted from 30% to 20%.

An incentive for FX Leading Banks that contributed to activating two-way trading in the KRW/USD market will be introduced by establishing a KRW/USD deduction. The regional coefficient applied when calculating the ecosystem conservation cooperation fund will add regions and zones of ecological naturalness.

Due to the amendment of the Groundwater Act, the exemption target for groundwater usage charges has changed to a reduction-eligible target. Accordingly, the scope of reduction can be set by local government heads through ordinances, considering factors such as "the development, use, and purpose of groundwater, usage compared to development capacity, and availability of alternative water sources."

The standard payment amount for substitute pasture creation, which had been frozen for three years, will be increased by 9.8% from 14,765,000 KRW to 16,226,000 KRW per hectare, reflecting annual increases in labor costs, surveying fees, and other unit price increases related to pasture creation and management.

Regarding the nuclear safety management charge collected from nuclear operators for safety regulatory work, the charge is calculated by multiplying the previous year's workload of the regulatory agency by the unit price. It was decided to reflect the increase in "previous year's workload" to make it more realistic and to adjust some unit prices. However, since it is difficult to consider that all regulatory agency staff are engaged in regulatory work, it was recognized that improvement in the unit price calculation method based on the average wage of personnel actually involved in regulatory work is necessary, and institutional improvements on this matter will be pursued concurrently.

Meanwhile, the meeting also reported on the "2021 Charge Operation Evaluation Results." This year, out of a total of 90 charges, an evaluation team composed of experts in agriculture, forestry, health, diplomacy, employment, and science and technology sectors conducted evaluations on 23 charges in these fields. The evaluation team recommended four institutional improvements: ▲ reconsideration of retention, ▲ enhancement of rationality regarding imposition targets and rates, ▲ improvement of charge usage purposes, and ▲ establishment of rights remedy procedures. The Ministry of Economy and Finance plans to consult with the relevant ministries in charge of each charge and prepare and announce institutional improvement measures by the first half of next year.

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