[Weekly Review] Pressure for 'Supplementary Budget' from Yeouido Since Early Year... Reducing Unfair Comprehensive Real Estate Tax on 'Inherited Housing'

Yoon Ho-jung, the floor leader of the Democratic Party of Korea, is delivering opening remarks at the joint meeting on the New Year's supplementary budget to overcome COVID-19 held at the National Assembly on the 5th. Photo by Yoon Dong-ju

[Sejong=Asia Economy Reporter Son Sun-hee] As the first week of the new year begins, demands for the preparation of a supplementary budget (추경) have emerged mainly from the political sphere. Lee Jae-myung, the Democratic Party candidate, has strongly pressured, suggesting that a 'January preparation' might be possible as early as now, while the government has expressed its intention to speed up the execution of the main budget rather than the supplementary budget. However, the government has left the door open for 'possible consideration' amid the ongoing strong demands.

Hong Nam-ki, Deputy Prime Minister and Minister of Economy and Finance, said on January 3, the first day of budget execution in the new year, at the Government Complex Sejong, in response to questions about whether a supplementary budget would be prepared, "We plan to make a decision after comprehensively reviewing and assessing the progress of quarantine measures, the damage situation of small business owners, the need for additional support, the scale of funds that can be mobilized from the existing budget, and tax revenue conditions." He added, "Primarily, the focus is on executing the budget related to small business owners as intensively as possible in the first quarter."

For now, the priority is to swiftly execute this year's main budget, but the possibility of reviewing a supplementary budget later remains open.

Lee Jae-myung, the Democratic Party's presidential candidate, is demanding a supplementary budget in the range of 25 to 30 trillion won. He indicated the possibility of 'January preparation' by saying, "I think it is naturally possible even before the Lunar New Year."

Reducing 'Unfair Comprehensive Real Estate Tax'... Inherited Houses Excluded from Housing Count for up to 3 Years

The government is moving to revise related enforcement ordinances to reduce the 'unfair comprehensive real estate tax (종부세).' This is to reduce cases where the burden of 종부세 suddenly surges due to houses inherited unexpectedly after a parent's death. Childcare centers, cultural assets, social enterprises, and Jongjung (宗中) houses will also receive partial 종부세 relief.

On the 6th, the Ministry of Economy and Finance announced a follow-up enforcement ordinance amendment containing these details.

The government decided that when applying the 종부세 rate to inherited houses located in the metropolitan area, special self-governing cities, or metropolitan cities, the house will be excluded from the housing count for 2 years from the date of inheritance commencement (date of death), and for 3 years in other provincial areas. Exclusion from the housing count allows avoidance of the heavy tax rate applied to multi-homeowners, effectively reducing the 종부세 burden significantly. However, while it does not apply to multi-homeowner status, it is included in the tax base.

The existing clause that excluded only houses with an inherited share of 20% or less and a publicly announced price of 300 million won or less from the housing count has been abolished and expanded to all inherited houses. The 2-3 year period from the inheritance commencement date is given, implying that the house should be sold within this period to avoid the heavy tax rate applied to multi-homeowners.

Last Year’s Agricultural and Marine Food Exports Surpass $10 Billion for the First Time

According to the Ministry of Agriculture, Food and Rural Affairs and the Ministry of Oceans and Fisheries, last year's provisional agricultural and marine food export value recorded $11.36 billion, a 15.1% increase from the previous year. This is the first time agricultural and marine food exports have surpassed $10 billion.

In the agricultural and food sector, the popularity of health foods and home meal replacements (HMR) led to increases in exports of both fresh agricultural products and processed foods. Health foods such as ginseng products (16.3%) and kimchi (10.7%), along with convenience foods like beverages (18.2%), rice-processed foods (18.1%), sauces (14.7%), and ramen (11.8%) showed strong growth.

Exports of grapes (24.1%) and strawberries (20.0%), designated as 'star items' by the government for product development, localization, and promotion support, also saw significant increases.

In the marine food sector, the representative export item, dried seaweed (gim), recorded exports of about $700 million, a 15.4% increase from the previous year. Gim exports have shown an increasing trend for 11 consecutive years since 2010.

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