Han Deok-su, "Uncertainty High for 1-2 Years... Must Choose to Reduce Corporate Burden"

On the 26th, in response to criticism of tax cut policies during the government questioning, "The focus should shift towards reviving the economy"
"Taxes should be kept low to secure revenue in the mid to long term"

[Asia Economy Reporters Oh Ju-yeon and Park Jun-i] Prime Minister Han Duck-soo said on the 26th, "Looking at the current economic situation, the economy is extremely difficult, and considering that the uncertainty will be very high for the next one to two years in the medium term, we have no choice but to choose to reduce the burden on companies at times like this."

[Image source=Yonhap News]

At the National Assembly's economic sector question session to the government on the same day, Prime Minister Han responded to the tax cut policy pointed out by Shin Dong-geun, a member of the Democratic Party of Korea, saying, "When choosing economic policies, there are clearly good and bad points, but policy authorities have no choice but to adopt what is more necessary at that point in time."

Prime Minister Han stated that he believes South Korea's future welfare direction should move toward 'moderate burden, moderate welfare.' In response, Representative Shin pointed out, "To move toward moderate burden and moderate welfare, tax increases are necessary, but the Yoon Seok-yeol administration is implementing tax cut policies in the opposite direction. Is it possible to raise welfare levels while lowering tax burdens and also reduce the national debt ratio? It is a contradictory policy." Prime Minister Han explained, "The main purpose of maintaining taxes somewhat low is to promote the belief that as the economic scale grows, the tax burden ratio relative to GDP will not increase, and tax revenue can be secured in the medium to long term."

Regarding fiscal soundness recovery, he said, "It is one of the most important policy goals of the new government," adding, "Over the past few years, debt has increased from about 600 trillion won to 1,000 trillion won, and I am concerned that the debt-to-GDP ratio, which was 38%, might reach the 50% range by the end of this year."

He added, "While the current indicators being poor is very important, the bigger problem is that the economy could worsen further in the medium to long term," and said, "Considering this, it would be better for our policy to shift the balance toward slightly reviving the economy for now."

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