Deputy Prime Minister and Minister of Strategy and Finance Choo Kyung-ho said that corporate tax cuts for small and medium-sized enterprises are larger than for large enterprises.
Today (5th), when Rep. Kim Joo-young of the Democratic Party of Korea asked, "Isn't the corporate tax cut a tax cut for the rich?" at the National Assembly's audit of the Ministry of Strategy and Finance at the National Assembly's Planning and Finance Committee The corporate tax reform plan provides a wider range of reductions for small and medium-sized enterprises than for large enterprises.”
According to this year's tax reform bill, the government expects large corporations to enjoy a 10% tax reduction and small and medium-sized enterprises to enjoy a 12% tax reduction.
When asked about the effectiveness of the corporate tax cut, Deputy Prime Minister Chu said, "There are scholars and some who say that research is not effective, but a number of research institutes and international organizations are recommending that the corporate tax cut is effective in expanding investment and creating jobs." "We need to think about why the Organization for Economic Cooperation and Development (OECD) countries have continuously lowered corporate taxes, and why previous governments of Korea have lowered corporate taxes," he said.
Regarding the plan to end this year's mutually beneficial investment promotion tax at sunset, he explained, "It started with good intentions, but after a few years, the opinion that it has no effect and it is just a regulation has come to be abolished," he explained.
The current tax law requires that 20% of unreturned income be paid as corporate tax (investment win-win cooperation promotion tax).
Unreturned income is income that a company keeps in the form of cash or deposits without spending it for investment, wages, or dividends.
It is a tax system aimed at revitalizing the economy by inducing corporate reserves of large companies into the market, but companies have seen it as a regulation and demanded its abolition.
(Photo = National Assembly Photo Reporters, Yonhap News)