2023-11-11 00:00:29
Chu Kyung-ho, Deputy Prime Minister for Economy and Minister of Strategy and Finance, is answering questions from lawmakers at the general meeting of the National Assembly Budget and Accounts Special Committee on the 10th./News 1
Deputy Prime Minister for Economy and Finance Chu Kyung-ho said, “It is time to change the inheritance tax system.” Deputy Prime Minister Chu also said, “If the National Assembly presents a reform plan, the government is willing to actively support it and participate in the discussion.”
On the 10th, Deputy Prime Minister Chu said in a comprehensive policy inquiry by the Budget and Accounts Special Committee of the National Assembly, “Korea has the highest inheritance tax among OECD (Organization for Economic Co-operation and Development) countries, and 14 out of 38 countries have no inheritance tax at all.” Deputy Prime Minister Chu said, “The average (0ECD inheritance tax) is 26%. This needs to be lowered overall, but there is still a lot of resistance when we bring up this issue.” He said, “There are many issues such as double taxation of inheritance tax, and there is a lot of resistance to the inheritance of wealth on one side of the public sentiment,” and added, “If the National Assembly proposes a reform plan, the government will actively discuss it.”
Korea imposes the highest inheritance tax in the world (up to 60%, when the largest shareholder premium is applied). The Samsung family was assessed an inheritance tax of 12 trillion won after Chairman Lee Kun-hee passed away in 2020, and is paying the tax in installments over five years. Recently, it announced that it would dispose of 2.6 trillion won worth of stocks of affiliates, including Samsung Electronics. It has also been pointed out that the high inheritance tax rate makes it difficult for competent companies to survive in Korea and is forcing them to move overseas.
Japan has a similar inheritance tax rate of 55% as Korea, but in 2018, it introduced a special business succession system that exempts inheritance tax if certain requirements are met. Through this, it was determined that keeping the company alive would benefit employment and the national economy. In the US and UK, the inheritance tax rate is 40%.
Previously, Jeong Gu-yong, Chairman of the Korea Listed Companies Association, mentioned the need to ease the inheritance tax rate at the ‘Inheritance Tax System Reform Seminar for Corporate Survival’ held at the National Assembly Library in Seoul hosted by People Power Party lawmaker Choi Jae-hyung on the 3rd. Chairman Chung said, “Some people criticize the inheritance of management rights as ‘passing on wealth,’ but businessmen think of it as ‘passing on responsibility.’ Excessive inheritance tax makes it impossible to maintain the spirit and responsibility of the company that the founder has created.” .
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