Last year, the government submitted a tax law revision bill to the National Assembly to reduce Korea’s corporate tax rate by 3 percentage points. It was a barometer that gauges the major direction of the current government’s tax policy to expand corporate investment in times of economic recession so as not to fall behind in the global tax rate competition. However, it was only reduced by 1%p against the opposition of the huge opposition party. I was peeing on my feet. And another bill of greatest interest was to increase the tax credit rate for facility investment by semiconductor companies. This bill was pushed back from the double-digit cut proposed by the ruling and opposition parties, and raised the bill from 6% to 8%.
Then, President Yoon Seok-yeol was furious. Regarding the ‘corporate tax rate cut by 1 percentage point’, President Yoon expressed regret, saying, “The cut in the highest corporate tax rate to enhance corporate global competitiveness and expand investment was not fully reflected due to the opposition party’s grabbing the majority of seats.” He then instructed the Ministry of Strategy and Finance to actively consider ways to further expand tax support for national strategic industries such as semiconductors. President Yoon gave such an order, saying, “It is regrettable that the tax support plan proposed by the special committee on semiconductors, which was formed with the launch of the Yoon government, was not sufficiently discussed.” ‘s core technology,” he added.
President Yoon’s order to review the tax credit rate for semiconductors was read as a decision made with a sense of urgency that ‘it should not go like this’ for semiconductors, the rice of the high-tech industry, even if the corporate tax rate was reduced by only 1%p due to fierce opposition from the opposition party.
Accordingly, on the 3rd, the Ministry of Strategy and Finance proposed a plan to double the tax credit rate for semiconductor facility investment from 8% to 15% for large companies. If this bill passes the National Assembly, it is expected that the tax burden of companies will be reduced by 3.6 trillion won next year alone.
However, those who oppose facility investment by conglomerates are immediately voicing opposition, saying that Samsung Electronics will benefit from the tax credit by 4.7 trillion won and SK Hynix by 1.1 trillion won. In addition, there are concerns in Yeouido’s political districts that if the original 10% increase proposal is opposed to the government’s plan, it will pass the National Assembly.
The increase in the tax credit rate for facility investment by semiconductor companies is an important bill that determines how to protect the rice of the industry and how to protect it. Still, many people seem to oppose this bill. why oppose It appears to be political reasons, preferential treatment for large companies, and unfairness in the tax credit system. However, if it is blocked for political reasons, it will be criticized as an act that hinders the growth of the Republic of Korea, and if it is a preferential treatment for large corporations, it is wrong that companies receiving tax credits will not increase their investment and the tax credited money will go into the pockets of owners of large corporations. I think it comes from thinking. In a word, it is a mistake. Samsung Electronics and SK Hynix are companies owned by shareholders, who are investors with stocks. Of course, the owners of large conglomerates are the majority shareholders, but they also eat three meals a day, not four. Of course, I ride a good car, but if you agree that you should ride a car that is as safe as that, I don’t think you can object.
Incidentally, the current semiconductor tax credit rate has been raised to 25% in the US and 25% in Taiwan, a competitor. In addition, China also announced that it would foster the semiconductor industry by spending 187 trillion won by 2025. As such, it is the same as giving up rice, which is our lifeline, if we are the only one who is behind our backs while competing countries are coming up with support measures one after another. It would be an act that is incompatible with the ‘internal enemy’ who intends to make our country powerless.
When companies live, so does the nation. When corporate wealth grows, so does the nation. Only when the state has strength can it prevent the 30-year invasion of Mongolia and the 36-year Japanese occupation, which were so grievous. Of course, the North Korean nuclear weapons overhead are also the same. It has been a long time since the economy (taxation) became insecure.