SEOUL– The presidential office on Friday stressed the importance of lowering corporate tax, a key sticking point that has hindered the National Assembly from handling the state budget proposal for next year, while calling for bipartisan cooperation over the budget bill.
“Our companies cannot compete with global companies while shouldering the burden of a high corporate tax rate,” Kim Eun-hye, senior presidential secretary for press affairs, told reporters.
Kim’s remarks were seen as a dismissal of National Assembly Speaker Kim Jin-pyo’s compromise offer on the issue.
Speaker Kim had proposed lowering the corporate tax rate by 1 percentage point in an effort to persuade the ruling People Power Party (PPP) and the main opposition Democratic Party (DP) to handle the budget plan, which has already missed the legal deadline on Dec. 2.
The PPP has pushed for gradually cutting the maximum tax rate to 22 percent to garner more investment in South Korea, while the DP has pushed to keep the current rate of 25 percent, claiming the PPP’s proposal is aimed at only benefiting conglomerates.
“The benefits of a lower corporate tax rate are equally spread to minority share holders, workers and subcontractors. There are some 10 million minority shareholders alone who hold shares of key domestic companies,” Kim said, rebutting the DP’s claim that the plan only benefits the superrich.
Noting how lower corporate tax rates in the United States and France have led to increased corporate investment, Kim stressed that corporate tax rate is a factor that many foreign companies consider when making investment decisions.
The presidential official urged the rival parties to engage in bipartisan efforts to handle next year’s budget amid concerns over an economic slowdown.
“An emergency response to a global economic recession all begins from next year’s state budget,” Kim said. “I would like to believe that political strife is not involved in weaving next year’s state budget in a balanced manner and preparing against economic headwinds.”
Source: Yonhap News Agency