Joint Statement Urging Passage of Corporate Tax Law Amendment in the Economic Sector

"The Corporate Tax Act Amendment is an Urgent Policy Measure to Overcome the Economic Crisis"

[Asia Economy Reporter Park Sun-mi] Six major economic organizations representing the domestic economy urged the prompt passage of the Corporate Tax Act amendment, calling it an urgent policy measure to overcome the economic crisis.

On the 6th, six economic organizations including the Federation of Korean Industries, the Korea Chamber of Commerce and Industry, the Korea Employers Federation, the Korea International Trade Association, the Korea Federation of Small and Medium Business, and the Korea Association of Mid-sized Enterprises stated in a joint statement, "Currently, our companies are experiencing deteriorating financial stability to levels seen in past economic crises due to severe sales slumps and increased inventory caused by the deep economic recession," adding, "Recently, liquidity securing has become difficult due to tightening financial markets caused by rising interest rates."

They particularly expressed concern that next year, the export market will worsen significantly due to increased uncertainty in the global economic environment, and domestic demand is expected to freeze due to weakened household consumption capacity caused by interest rate hikes, further exacerbating management difficulties for companies. They emphasized, "The Corporate Tax Act amendment currently under discussion in the National Assembly, which mainly includes a reduction in the corporate tax rate, is an urgent policy measure that can alleviate these difficulties faced by companies and help overcome the economic crisis."

The economic organizations highlighted that lowering corporate taxes promotes corporate investment and employment, and that the benefits flow to stakeholders such as shareholders and workers, resulting in positive ripple effects throughout society. They also explained that indirectly increasing corporate surplus income serves as an important financial defensive measure enabling companies to withstand the current severe financial pressure.

The six economic organizations stated, "While major countries have been lowering corporate tax rates to secure the competitiveness of their domestic companies and attract foreign companies, Korea has rather increased corporate tax rates, causing difficulties in securing corporate competitiveness," and urged, "We hope the Corporate Tax Act amendment will be promptly passed so that our companies can overcome the current economic crisis and achieve an equal position in the economic competition with global companies."

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