The government and the Democratic Party of Korea have confirmed the 'Second-Phase Fiscal Decentralization Promotion Plan', which aims to increase local finances by approximately KRW 2 trillion.
By raising the local consumption tax rate by 4.3 percentage points from the current 21% to 25.3%, the local finances will increase by KRW 1 trillion, and an additional KRW 1 trillion will be secured through the 'Fiscal Decentralization and Local Extinction Response Fund'.
At the plenary meeting of the Democratic Party's Special Committee on Financial Decentralization held at the National Assembly today (28th), the party government agreed on a plan to promote fiscal decentralization in the second stage with this content.
Rep. Kim said, "At the beginning of the extraordinary session of the National Assembly in August, we agreed to officially hold a signing ceremony for the second stage of fiscal decentralization and to start discussing the prospects for the third stage of fiscal decentralization."
The Democratic Party initially promoted a plan to raise the local consumption tax rate by 7 percentage points, but it is reported that the Ministry of Strategy and Finance disagreed and agreed to a 4.3 percentage point increase.
Rep. Kim said, "Considering the increase in national debt in the process of overcoming the COVID-19 crisis, a slight speed adjustment was inevitable in the second stage of fiscal decentralization." I did.
The Democratic Party plans to make a legislative bill containing today's decisions and process the bill at the plenary session in September at the earliest.
(Photo = Yonhap News)