Ruling and Opposition Parties Still Divided on 'Corporate Tax Cut'... Budget Negotiations Face Difficulties

People Power Party Advocates 'Top Tax Rate Reduction' for Large Corporations
Democratic Party Calls for Reduction in 200M-500M KRW Range for SMEs

[Image source=Yonhap News]

[Asia Economy Reporter Kwon Hyun-ji] As the motion to dismiss Lee Sang-min, Minister of the Ministry of the Interior and Safety, was prioritized and passed at the National Assembly plenary session on the 11th, negotiations between the ruling and opposition parties over next year's budget bill are still facing difficulties. With no consensus in sight, it remains uncertain whether an agreement on the budget can be reached before the plenary session on the 15th.

The biggest point of contention is the 'corporate tax reduction.' The People Power Party argues for lowering the top corporate tax rate, which applies to about 100 large corporations, from 25% to 22%, while the Democratic Party insists that the corporate tax rate for the tax base between 200 million and 500 million KRW, which applies to small and medium-sized enterprises, should be reduced from 20% to 10%.

Lee Su-jin, the Democratic Party's floor spokesperson, said in a briefing, "If the corporate tax rate for the tax base between 200 million and 500 million KRW is lowered, about 54,000 small businesses would be included, so wouldn't it be better to reduce corporate taxes in this area?" She criticized, "The government and ruling party are only interested in corporate tax cuts for conglomerates and large corporations and have no interest in our proposal."

Regarding the specific details of the 'tax cut plan for ordinary people' proposed by Democratic Party leader Lee Jae-myung, Lee added, "We are conducting practical reviews on whether adjustments to corporate tax for small and medium-sized enterprises and earned income tax can be made in response to the mega-corporate tax cuts," and further stated, "The combined basic pension for elderly couples is being reduced; shouldn't it be abolished?"

[Image source=Yonhap News]

The People Power Party countered the Democratic Party's attitude toward budget processing as "refusal to accept the presidential election results." Song Eon-seok, the People Power Party's senior deputy floor leader, criticized at the National Assembly plenary session that day, "Why is the Democratic Party blocking and refusing to negotiate to increase the 'Lee Jae-myung budget'?" He pointed out, "They are threatening to only cut the budget and vote on amendments to the budget bill submitted by the government to the National Assembly."

Senior spokesperson Yang Geum-hee also fired back, saying, "Since they cannot increase the budget, they have set tax cuts as the direction and emphasized exercising authority over budget-related bills, revealing their intention for 'complete budget blockade.' This is a direct order from Leader Lee to commit legislative violence, threatening and regressing democracy."

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