Ruling Party and Government Push for Income Tax and Corporate Tax Rate Cuts

This Year's Tax Reform Proposal Party-Government Consultations
Focused Discussions on Reducing Tax Burden for Low and Middle-Income Classes
Real Estate Tax Normalization and Meal Expense Deduction Benefits

Deputy Prime Minister for Economic Affairs Choo Kyung-ho is delivering opening remarks at the 2022 Tax Reform Plan Party-Government Consultation held at the National Assembly on the 18th. Photo by Yoon Dong-joo doso7@

The People Power Party and the government are pushing for income tax cuts to ease the tax burden on low- and middle-income earners. They also reached a consensus on lowering corporate tax rates to boost private sector vitality and easing inheritance deduction requirements for small and medium-sized enterprises (SMEs) and mid-sized companies.

On the 18th, the party and government held a tax reform consultation meeting for 2022 at the National Assembly to discuss these matters. After the meeting, Seong Il-jong, the Policy Committee Chair of the People Power Party, stated in a briefing, "We agreed that the tax system is out of sync with global standards, which lowers tax competitiveness," and added, "We shared the recognition that the tax system should be restructured in accordance with tax principles to enhance economic vitality and support the stabilization of the livelihood economy."

The core of the discussion that day was on measures to reduce the tax burden on low- and middle-income earners. Chair Seong said, "I strongly requested the government to actively consider easing the tax burden on low- and middle-income earners who are struggling amid high inflation," and added, "I urged measures to stabilize livelihoods, such as reducing income tax burdens, normalizing the real estate tax system, and expanding meal expense deduction benefits for office workers." Regarding income tax, Chair Seong said, "I hope to provide significant benefits to those with lower incomes and requested that the taxable income brackets be widened." Widening the taxable income brackets effectively lowers the tax rate. Chair Seong also said they would actively pursue expanding the non-taxable limit for meal expenses for office workers, adding, "I strongly requested tax deduction benefits for salaried workers’ meal expenses, which Assemblyman Song Eon-seok has already proposed."

On the 18th, Kwon Seong-dong, Acting Leader of the People Power Party, and Choo Kyung-ho, Deputy Prime Minister of Economy, along with other key attendees, are taking a commemorative photo at the 2022 Tax Reform Plan Party-Government Consultation held at the National Assembly. Photo by Yoon Dong-joo doso7@

The ruling party also urged the government to improve the corporate tax system to enhance economic vitality. Chair Seong said, "I requested the need to reform the tax system, including lowering corporate tax rates, to secure companies’ capacity for investment and job creation," and added, "It is necessary to drastically improve the succession system for businesses that inherit family businesses to support the competitiveness of mid-sized and small enterprises." He emphasized, "This is especially necessary for advanced industries and technology-intensive industries," and when asked about the number of companies that would benefit, he said, "The government will announce the number of companies when it makes the announcement."

Regarding the specific extent of the corporate tax cut, he said, "I hope it will be aligned with the average level of the Organisation for Economic Co-operation and Development (OECD)," and added, "The government will decide considering various factors such as tax revenue and economic management." On real estate taxation, he said, "We also discussed the need to normalize the tax system, which has been excessively used for real estate market control and operated punitively."

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