Presidential Office: "Next Year's Budget, Emergency Measures for Global Survival Competition"

Corporate Tax Cut "Cannot Compete Globally with High Corporate Tax Burden"
Response to 'Super-Rich Tax Cut' Frame: "10 Million Small Shareholders"

[Image source=Yonhap News]

[Asia Economy Reporter Ki-min Lee] On the 16th, the Presidential Office urged the National Assembly, which is struggling to pass next year’s budget bill, to engage in bipartisan cooperation, stating, "The global economy is under dark clouds. Therefore, next year’s national budget is an emergency prescription for the global survival competition."

Regarding the contentious issue of corporate tax cuts, the biggest point of negotiation in next year’s budget bill, the office reiterated, "Our companies cannot compete with global corporations while bearing a high corporate tax burden."

Kim Eun-hye, the Presidential Office’s Chief Public Relations Officer, made these remarks during a briefing at the Yongsan Presidential Office in the afternoon, addressing the difficulties the National Assembly is facing in passing next year’s budget bill.

Chief Kim emphasized the importance of passing the budget bill, saying, "Even amid political conflicts, there must be moments of agreement for the people," and added, "For the national interest, it is necessary to stop running parallel lines."

She particularly stressed, "Now is the moment when the economic emergency lights are on. I want to believe that political strife has not interfered with preparing for external economic shocks," and appealed, "Saving companies, standing together with the vulnerable who suffer more when the economy worsens, surviving in international competition, and responding to an emergency economy all start with next year’s national budget. We once again request active cooperation from both ruling and opposition parties on the new year’s budget bill."

She also refuted the Democratic Party’s framing of the corporate tax rate cut as a "super-rich tax cut." Chief Kim stated, "The benefits of corporate tax cuts are evenly distributed to small shareholders, workers, and partner companies," noting, "There are about 10 million small shareholders in major domestic companies alone."

Earlier, the government submitted a tax law amendment to lower the top corporate tax rate for large corporations with a taxable income exceeding 300 billion won from the current 25% to 22%, a 3 percentage point reduction. However, the Democratic Party has strongly opposed this, labeling it a "super-rich tax cut." As a mediation proposal, Kim suggested a 1 percentage point reduction, but the ruling People Power Party has withheld acceptance, arguing that a 1 percentage point cut is insufficient.

Chief Kim also said, "We cannot compete with global companies while bearing a high corporate tax burden. Even for semiconductor companies, not only the top corporate tax rate but also the effective tax rate in our country is nearly twice as high," citing the difference in effective corporate tax rates between Samsung (21.5%) and its competitor, Taiwan’s TSMC (11.5%) as of 2020.

She continued, "Looking at recent cases of foreign countries such as the United States and France that have lowered corporate taxes, corporate investment has increased. In 2008, the economic effect of corporate tax cuts in our country led to a significant increase in facility investment and employment," she explained.

She also expressed the position that corporate tax cuts are necessary to attract foreign corporate investment, saying, "When foreign companies establish subsidiaries in other countries, they compare tax systems such as corporate tax rates in addition to infrastructure regulations and labor costs."

After the briefing, when a reporter asked, "To what extent can the Presidential Office accept the corporate tax cut rate?" a senior official from the Presidential Office said, "The authority for this negotiation is entirely granted to the ruling and opposition parties," and added, "Deadlines or numbers are not our responsibility," withholding further comment.

Meanwhile, regarding the 49th-day memorial service for the victims of the Itaewon tragedy, the official stated, "Our condolences remain the same as on that day and now at the 49th-day memorial. We repeatedly pray for their souls," and added, "It is the path for the victims and their families to uncover the truth and take appropriate measures. We will remember that pain and do our best with humility and a heavy heart." The Presidential Office reported that Kang Seung-gyu, Senior Secretary for Civil Society, attended the 49th-day memorial held at Jogyesa Temple in Jongno on the same day.

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