Ruling and Opposition Parties Promise Priority Handling of Minsheng Bills, but Obstacles Arise Everywhere

Additional Fuel Tax Cut and Expansion of Meal Expense Tax Exemption Expected to Pass Smoothly
Safety Freight System and Real Estate Taxation Show Sharp Party Divisions

[Image source=Yonhap News]

[Asia Economy Reporter Kwon Hyun-ji] The ruling and opposition parties have agreed to form a Special Committee on Livelihood Economy Stabilization and are expected to accelerate the passage of livelihood-related bills aimed at alleviating the economic hardships of ordinary citizens. However, concerns remain that swift passage may be uncertain due to persistent differences between the parties on some key issues such as the Safe Freight Rate System and real estate tax policies.

On the 20th, the National Assembly held a plenary session and passed a motion to establish the Special Committee on Livelihood Economy Stabilization. The livelihood bills to be discussed by the committee include ▲further expansion of the fuel tax reduction (Restriction of Special Taxation Act, Transportation Energy and Environment Tax Act, Individual Consumption Tax Act) ▲introduction of a delivery price linkage system (Act on Promotion of Mutual Cooperation between Large, Medium, and Small Enterprises, Fair Transactions in Subcontracting Act) ▲improvements to real estate-related systems ▲expansion of the non-taxable limit for employee meal allowances (Income Tax Act) ▲abolition or extension of the sunset clause for the Safe Freight Rate System (Freight Motor Vehicle Transport Business Act) ▲refunds for public transportation fares (Act on Promotion and Use of Public Transportation), among others. The plan is to swiftly pass these bills by the committee’s activity deadline of October 30.

The first item expected to be discussed is the further expansion of the fuel tax reduction. Although the fuel tax cut was increased to the legal maximum of 37% starting from the 1st of this month, the impact felt by consumers has been minimal, raising calls for additional reductions. In the People Power Party, lawmakers Bae Jun-young and Seo Byung-soo have submitted amendments to increase the flexible fuel tax rate range to 50% and 100%, respectively, while in the Democratic Party, lawmaker Kim Min-seok has introduced an amendment to raise it to a maximum of 70%. Both parties have reached a consensus on further reductions, so the bill is expected to pass smoothly.

Expanding the non-taxable limit for employee meal allowances is also one of the bills on which both parties agree. Song Eon-seok of the People Power Party has introduced an amendment to the Income Tax Act to raise the non-taxable limit from the current 100,000 won to 200,000 won, and Park Hong-geun, the floor leader of the Democratic Party, stated at a field meeting of the party’s Livelihood Priority Implementation Team that “We will pass the ‘Meal Support Act’ to raise the non-taxable meal allowance limit from 100,000 won to 200,000 won and apply it retroactively from January of this year.” Both parties have also expressed intentions to promote legislation related to public transportation fare refunds.

[Image source=Yonhap News]

However, apart from these bills, clashes between the ruling and opposition parties are inevitable, and passage is expected to be difficult. A representative example is the abolition of the sunset clause for the Safe Freight Rate System. The Safe Freight Rate System was introduced in 2020 to guarantee appropriate wages for freight transport workers and prevent overwork, overloading, and speeding. The Democratic Party insists on abolishing the sunset clause to continue and expand the system, while the People Power Party argues that the system’s performance should be analyzed before deciding whether to abolish or extend the sunset clause.

It also seems difficult to narrow differences on real estate system improvements. When the People Power Party and the government expressed intentions to pursue tax cuts such as expanding the tax credit limit for single-homeowners and abolishing the progressive comprehensive real estate holding tax for multiple homeowners, the Democratic Party opposed, stating, “This is not the time to focus solely on real estate tax cuts,” signaling a clash.

Regarding the delivery price linkage system, which reflects raw material price increases in delivery prices, there is consensus on the necessity between the parties, but opposition arguing that it violates market autonomy principles is strong, so it is expected to take time before it is introduced.

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