Final Disagreement Between Ruling and Opposition Leaders on 'Semiconductor Special Act'... Difficult to Present in Plenary Session

Joo Ho-young "Democratic Party Demands All Other Bills Be Submitted, No Discussion Occurred"
Ryu Seong-geol "Agreed on 8·8·16% in the Tax Subcommittee of the Strategy and Finance Committee"
Large Gap Between Ruling and Opposition Positions, Government Proposal Likely Reflected

[Asia Economy Reporters Hyunju Lee and Youngwon Kim] The ruling and opposition parties have reached an agreement in the relevant standing committee on the amendment to the Restriction of Special Taxation Act, commonly known as the 'Semiconductor Special Act (K-Chips Act),' but failed to coordinate at the last minute, making its passage in the plenary session on the 23rd uncertain.

Joo Ho-young, floor leader of the People Power Party, said after the party strategy meeting held at the National Assembly on the same day, "We requested the submission of the semiconductor-related bill, but the Democratic Party insisted on submitting all other bills they demanded as well, so no discussion has taken place."

The bill includes provisions to deduct a certain percentage of the investment amount from taxes for large, medium, and small enterprises investing in facilities for the national advanced strategic semiconductor industry. Currently, the tax deduction rates are 6% for large enterprises, 8% for medium-sized enterprises, and 16% for small enterprises.

Joo Ho-young, floor leader of the People Power Party, is attending the party strategy meeting held at the National Assembly on the 23rd and delivering opening remarks. Photo by Yoon Dong-joo doso7@

The ruling party proposed raising the tax credit rates to 20% for investments in national advanced strategic industry facilities such as semiconductors by 2030, 25% for medium-sized enterprises, and 30% for small enterprises. The opposition party has argued for tax credits of 10%, 15%, and 30% for large, medium, and small enterprises, respectively.

As the ruling and opposition parties failed to narrow their differences, the Tax Subcommittee of the Planning and Finance Committee, which had been discussing the bill, decided to accept the government proposal (8%, 8%, 16%). The bill was also designated as a budget-related bill, and an agreement was reached at the subcommittee level. Ryu Seong-geol, chairman of the Tax Subcommittee of the Planning and Finance Committee and a member of the People Power Party, said in a phone interview on the day, "Raising the rate to 8% for large enterprises is an issue agreed upon in the Tax Subcommittee," adding, "Because the semiconductor-related bill has not been passed in the National Assembly's Industry, Trade, Energy, Small and Medium Venture Business Committee (Sanjoongwi), the Tax Subcommittee made that decision."

However, as the leadership of both parties have not finalized their positions, the possibility of the Semiconductor Special Act being submitted to the plenary session on the day has decreased. Floor leader Joo reiterated, "There was no discussion at all."

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