On the 5th, in the National Assembly’s budget committee over the Ministry of Strategy and Finance, there was a tension between women and nights over the trickle-down effect of the corporate tax rate cut.
While the position that “a corporate tax cut can promote corporate investment” was opposed to the point that it was “a benefit that only increases the company’s reserves”.
At the National Assembly on that day, Rep. Shin Dong-geun of the Democratic Party of Korea argued that companies have no choice but to invest in order to survive regardless of the corporate tax cut.
Rep. Shin said, “It seems that we are still expecting a trickle-down effect through the corporate tax cut, but there are many controversies among scholars. Profits are falling. The general trend is that the impact of the corporate tax cut has significantly decreased.”
Rep. Shin insisted on the need to activate tax credits linked to actual investments rather than tax cuts to promote corporate investment.
Rep. Shin said, “I want to receive data and reports from companies. Semiconductors such as SK and Samsung have short cycles and cannot survive unless they make real investments, so they invest without reducing corporate tax.” are investing in the long term with You don’t have to do it,” he said.
He added, “It is better to deduct the investment tax in practice. After pointing out that the Ministry of Commerce, Industry and Energy cut all the budget to support companies by building industrial complexes in Pyeongtaek or Yongin, he pointed out, “Companies are not asking for a corporate tax cut.”
Deputy Prime Minister Choo Kyung-ho said, “One of the corporate tax cuts is not an opportunity to make investment decisions. He said, “I mentioned a few companies, but in fact, countries around the world are offering tax reductions and financial support to attract these companies.”
“The investment tax credit has been reinforced in the tax law amendment bill. The economy could get worse next year, so it is important to lay the groundwork for economic recovery through tax cuts and exemptions,” he added.
Rep. Hae-jin Cho, the People’s Power, mentioned the need to support the succession of small and medium-sized businesses. Rep. Cho said, “Competitive, long-lived companies play the role of supporting the economy of the country. It is a pity that the tangible and intangible assets that we invested in hard work are lost, but the conditions are not good to pass it down to our children.”
In response, Deputy Prime Minister Choo Kyung-ho said, “In this tax reform, we have included a plan to reduce the tax burden compared to the previous one through special taxation on the gift tax on family business succession. We will create jobs through generation transfer of capital and management know-how.”