Ruling and Opposition Parties Pay Lip Service to Regional Balance
As both the ruling and opposition parties emphasize balanced regional development, 16 bills to lower local and corporate taxes for mid-sized companies based outside the Seoul metropolitan area remain pending in National Assembly standing committees as of Friday. A corporate tax law revision proposed by Rep. Seo Il-jun of the People Power Party in March is stalled in the Strategy and Finance Committee, while his local tax law revision sits in the Public Administration and Security Committee. Both bills would apply lower tax rates to small and mid-sized companies headquartered outside the capital region. The corporate tax revision would apply rates of 8% on taxable income up to 200 million won, 17% on amounts from 200 million to 20 billion won, 19% on amounts up to 300 billion won, and 23% above that. "This is not about partisan politics but the nation's future, so it must pass," Seo said.
Bills jointly proposed by both parties are also going nowhere. In February, 23 lawmakers led by Reps. Heo Seong-moo of the Democratic Party and Ku Ja-geun of the People Power Party proposed a revision to the Restriction of Special Taxation Act that would reduce a certain percentage of income tax for workers employed at companies in non-metropolitan regions, but it remains under review by the Strategy and Finance Committee. A special act on promoting balanced regional investment, proposed in June of last year by 108 lawmakers led by Rep. Kim Sang-hoon of the People Power Party, would create 'opportunity development special zones' offering fiscal and tax support, yet it too is pending in the Trade, Industry, Energy and SME Committee.
President Lee Jae-myung has presented balanced regional development not only as a campaign pledge but as a key policy of his administration, and discussed local development strategies at the Central-Local Cooperation Council held on the 26th of last month with metropolitan government heads in attendance. "The government is dragging its feet, citing tax equity principles, but it needs a more proactive change of attitude," Heo pointed out, while Ku urged, "The government must show firm and active commitment." Rep. Bae Joon-young of the People Power Party, the opposition's deputy floor leader on the Strategy and Finance Committee, said, "Discussion was delayed because we are handling non-controversial bills first, and these will be processed in turn," adding, "Just as the government provides support, it is only natural to counter regional extinction through tax incentives."
No specific timeline has been set for deliberating the pending bills.
