SEOUL — South Korean President Yoon Suk Yeol has pledged to reform conditions to facilitate the succession of family-owned conglomerates, addressing the concerns over high inheritance taxes that have been dissuading these businesses from increasing their market value.
According to Yonhap News Agency, During a special lecture on the occasion of the 51st Commerce and Industry Day, attended by around 1,000 individuals including executives from leading family-run conglomerates like Samsung Electronics, Hyundai Motor Group, and LG Group, President Yoon emphasized the challenges faced by businesses transitioning from the first to subsequent generations. He highlighted that the fear of elevated inheritance taxes has led companies to shy away from enhancing business value, improving employee working conditions, or pursuing innovation.
Yoon detailed the government's commitment to revising the related systems to ensure smoother family business successions, which he believes will lead to sustained employment and continued economic growth. He referenced Germany as an example where a more conducive family business succession system has been implemented, allowing companies to concentrate on innovation, contrasting it with South Korea's current inheritance tax rate of 50 percent.
Furthermore, President Yoon reiterated his commitment to labor reform, proposing more flexibility in the labor market to adapt to industrial structural changes. He expressed concern over the current state of the labor sector, describing it as dominated by "ideologically armed labor union cartels" engaging in unlawful activities. The government plans to maintain the 52-hour workweek system but will look into introducing sector-specific flexibility. Yoon also proposed revising wage systems to reward performance rather than seniority and encouraged the adoption of diverse working models, including remote and hybrid arrangements.