Lee Hyung-il, the nominee for deputy prime minister and minister of finance and economy, has signaled a cautious stance on differentiating corporate tax rates by region and on introducing capital gains taxes, including the financial investment income tax.
According to the Ministry of Finance and Economy on the 13th, Lee said in written answers submitted to the National Assembly ahead of his confirmation hearing on Sept. 15 that whether to introduce the financial investment income tax is "a matter to be reviewed after market conditions have sufficiently stabilized." On taxation of virtual assets, which takes effect next year, he said specific standards would be announced within this year through a National Tax Service notice.
On revising inheritance and gift taxes, Lee said views calling for lighter tax burdens in light of high inheritance tax rates coexist with opposition citing wealth inequality and tax fairness. "In-depth discussion is needed that takes into account fiscal conditions and the beneficiaries, on the premise of gathering diverse views and building social consensus," he said.
On corporate taxes, he drew a line, saying no further rate cuts are under review. Responding to arguments that gaps in corporate tax rates, investment tax credits and employment tax credits should be widened to encourage corporate investment outside the greater Seoul area, he said, "Differentiating the corporate tax rate, a national tax, by region requires a cautious approach, considering tax fairness among regions and companies and the impact on public finances."
On fiscal policy, he stressed that "an active fiscal role is needed" to respond to external uncertainty and structural problems in the economy, while adding that "mechanisms to ensure sustainability are needed" to prevent excessive increases in national debt and mandatory spending.
