Eunseok Choi of People Power Party: "Corporate and Income Tax Reductions Should Apply to Expansion Investment Companies Too"

Amendment to the Restriction of Special Taxation Act Proposed
to Benefit Companies within Opportunity Development Zones

On September 3, Eunseok Choi, a member of the People Power Party (representing Dong-gu and Gunwi-gun Gap in Daegu), sponsored a partial amendment to the Restriction of Special Taxation Act. This amendment would allow not only new and start-up companies within Opportunity Development Zones, but also companies making expansion investments, to benefit from income and corporate tax reductions. If passed, the amendment would include expansion investments by existing companies as eligible for tax support, thereby promoting regional investment and job creation, as well as providing a stable foundation for young people and contributing to balanced national development.

The Opportunity Development Zone system was introduced to ease the concentration of population and resources in the Seoul metropolitan area and to promote balanced regional development. However, current law has limited tax benefits to newly established companies only. As a result, existing companies have been unable to receive support even when making expansion or additional investments, which has hindered the system’s intended effect and led to ongoing concerns about fairness in the field.

Eunseok Choi, member of the People Power Party

In Daegu, three areas-Suseong Alpha City, Daegu National Industrial Complex, and Geumho Waterpolis-were designated as Opportunity Development Zones last year, with large-scale investments planned. However, companies preparing for expansion investments have hesitated to proceed due to their exclusion from tax support. The proposed amendment aims to address these limitations, boost companies’ willingness to invest, and revitalize the regional industrial ecosystem.

In fact, when the scope of tax reductions for overseas-returning companies was expanded from new establishments to include expansions in 2020, both investment and employment increased. This bill is also expected to create a virtuous cycle of investment and employment, providing a foundation for stable, high-quality jobs for local youth. Considering that Daegu faces the most severe net outflow of young people in the country, the amendment is seen as a crucial breakthrough to prevent talent drain and improve local living conditions.

Eunseok Choi emphasized, “This amendment aims to fulfill the original purpose of the Opportunity Development Zones and to provide institutional support for Daegu’s future industrial restructuring and youth job creation. In particular, since three zones-Suseong Alpha City, the National Industrial Complex, and Geumho Waterpolis-have been designated, active expansion investments by existing companies are essential for strengthening the competitiveness of the regional industrial ecosystem.”

He added, “Corporate investment is not just about capital expansion; it is a process that creates new added value across research and development, production, and employment. By extending tax support to include expansions, we can reduce uncertainty for companies and accelerate investment decisions, leading to direct improvements in regional economic growth rates and employment indicators.”

Choi further stated, “Daegu is considered the region with the most severe net outflow of young people nationwide. The main reason young people leave is the lack of high-quality jobs. Only when expansion investments by companies increase will young people be able to find stable jobs and build their lives in their hometown.”

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