SEOUL– The ruling People Power Party (PPP) on Friday urged the main opposition Democratic Party (DP) to agree to lower the corporate tax rate, saying it is a matter related to “national competence.”
The corporate tax rate has been one of the key disagreements between the PPP and DP in their ongoing negotiations for next year’s government budget.
The PPP has pushed for gradually cutting the maximum tax rate to 22 percent to garner more investment in South Korea.
On the other hand, the DP has pushed to keep the current rate of 25 percent, claiming the PPP’s proposal is aimed at only benefiting conglomerates.
In an effort to broker a deal, National Assembly Speaker Kim Jin-pyo proposed a compromise of lowering the rate to 22 percent but postponing its implementation by two years. The DP has yet to accept the deal.
“Investment leads to more jobs, and employment is the best welfare there is,” Rep. Joo Ho-young, the PPP floor leader, said in a party meeting.
No companies would come to South Korea when nearby Taiwan has a corporate tax rate of 20 percent, Joo said, claiming the country might lose investment in semiconductor and other key industries to other countries with the current tax rate in place.
The rival parties have been stuck in a parliamentary deadlock over the Yoon Suk-yeol government’s first budget plan and the DP’s proposed motion to dismiss the interior minister over the bungled government response to the Itaewon crowd crush.
Last week, the Assembly missed the legal deadline to pass the first annual budget plan drawn up by the Yoon administration since it came to power in May, leaving the parties until Friday to handle the proposal within the Assembly’s regular session.
Source: Yonhap News Agency