Miae Kim Proposes Amendment to Corporate Tax Act to Reduce Top Tax Rate by 2%p

First Corporate Tax Rate Cut Bill Since the Opening of the 22nd National Assembly
Simplification of Tax Brackets from Current 4 Steps to 3 Steps

A partial amendment to the Corporate Tax Act, which lowers the top corporate tax rate to the 22% level before the Moon Jae-in administration and simplifies the tax base brackets, was proposed on the 9th. This is the first bill in the 22nd National Assembly to lower the corporate tax rate itself rather than as a special case.

On the 9th, Kim Mi-ae, a member of the People Power Party, took the lead in proposing a partial amendment to the Corporate Tax Act that lowers the current top corporate tax rate from 24% to 22%, a 2 percentage point reduction, and simplifies the taxable income brackets from four stages to three.

[Image source=Yonhap News]

The proposal is to set the tax rate at 10% for taxable income up to 500 million KRW, 20% for income exceeding 500 million KRW up to 300 billion KRW, and 22% for income exceeding 300 billion KRW. Currently, the rates are 9% for taxable income up to 200 million KRW, 19% for 200 million to 20 billion KRW, 21% for 20 billion to 300 billion KRW, and 24% for income exceeding 300 billion KRW.

The government announced a tax reform plan in 2022 that pursued a corporate tax reform similar to the bill proposed by Representative Kim, but ultimately kept the tax brackets unchanged and only lowered the rates for each bracket by 1 percentage point.

Representative Kim Mi-ae stated, "During the Moon Jae-in administration, excessive corporate and income tax burdens caused a decrease in jobs and a decline in corporate investment motivation," adding, "If major conglomerates such as Samsung Electronics posted large operating losses last year leading to a decrease in corporate tax revenue, it is necessary to consider policies that lower corporate taxes to revitalize the economy and businesses."

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