Withholding Acceptance of 'Mediation Proposal'... "1%p Corporate Tax Cut is Far from Enough"

[Image source=Yonhap News]

[Asia Economy Reporter Yoo Byung-don] On the 15th, the People Power Party expressed dissatisfaction with National Assembly Speaker Kim Jin-pyo's 'final mediation proposal' for the passage of next year's budget, including a 1 percentage point (p) reduction in the corporate tax rate, and announced a stance of 'withholding acceptance.'

At the party meeting that day, the People Power Party reached a consensus that "a 1%p reduction in the corporate tax rate is far from sufficient," Rep. Joo Ho-young, the floor leader, told reporters regarding the mediation proposal presented by Speaker Kim.

Floor Leader Joo explained, "There are 6 to 7 more contentious items where the ruling and opposition parties do not agree in the budget, and it is impossible to say whether we will accept or reject the proposal without resolving those."

Earlier that day, Speaker Kim met with the floor leaders of both parties and presented a final mediation proposal to resolve key issues, including lowering the top corporate tax rate from 25% to 24%, and allocating the budgets for the Ministry of the Interior and Safety's Police Bureau and the Ministry of Justice's Personnel Information Management Unit to contingency funds until legislative resolution through bipartisan consultation or a decision on the legality by an authorized institution is made.

Within the party, some expressed that the mediation proposal is insufficient compared to the government and ruling party's position that the top corporate tax rate should be lowered from 25% to 22%, and that prioritizing the expenditure of the Police Bureau and Personnel Information Management Unit budgets from contingency funds is also inappropriate.

Floor Leader Joo previously told reporters, "Lowering the corporate tax by 1%p is actually like 'pissing on frozen feet' (a futile act)," adding, "There is no real tax cut effect, and given the international competition to attract direct investment, we fundamentally have doubts about what effect lowering it by 1%p will have."

He added, "With many other contentious issues remaining, we will see whether an agreement can be reached once everything is collectively resolved. It is still difficult to say how we will respond based solely on the Speaker's mediation proposal."

When asked about the presidential office's stance on the mediation proposal, Floor Leader Joo replied, "(The presidential office) has no opinion. They said to leave it to the party to handle."

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