Opinions such as investment effect and tax revenue secured… to further discuss
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(Seoul = Yonhap Infomax) Reporter Kim Jae-hwan = A bill to raise the tax credit rate from 8% to 15% for investments in national strategic technology facilities such as semiconductors by large and medium-sized companies failed to pass the threshold for legislation by the National Assembly.
The Planning and Finance Committee of the National Assembly held a tax subcommittee on the followingnoon of the 14th to discuss the amendment to the Special Taxation Restriction Act (Special Taxation Act), but failed to pass a resolution.
Previously, the government proposed an amendment last month to strengthen the competitiveness of national strategic industries such as semiconductors.
The main point of the amendment is to increase the tax credit rate for investment in national strategic technology commercialization facilities from 8% to 15% for large and medium-sized companies and from 16% to 25% for small and medium-sized companies.
In addition, a temporary investment tax credit system will be introduced this year that provides tax benefits for investment for a limited time.
When investing in general facilities, the basic deduction rate will be raised from 1% to 3% for large companies, 5% to 7% for medium-sized companies, and 10% to 12% for small and medium-sized companies.
In the case of tax credit rates for investments in new growth and source technologies, large companies will increase from 3% to 6%, medium-sized companies from 6% to 10%, and small and medium-sized companies from 12% to 18%.
The additional deduction rate applied when the amount invested this year exceeds the annual average investment amount for the previous three years will also be raised from 3-4% to 10%.
Initially, the government submitted a tax reform bill to the National Assembly last year to increase the tax credit rate for large corporations from 6% to 8%.
The ruling and opposition parties argued that the tax credit rate for large corporations should be raised to 20% and 10%, respectively, to revitalize industries such as semiconductors.
As a result, a special tax law that applies an 8% tax credit rate to conglomerates has been enforced since last month, but the government came up with this amendment following President Yoon Seok-yeol ordered to consider additional expansion of tax support for semiconductors.
In the course of the discussion, the ruling and opposition parties agreed on the expansion of tax credits in terms of stimulating the economy, but exchanged opinions on specific tax cuts and investment effects, and how to secure tax revenue.
Rep. Shin Dong-geun of the Democratic Party, secretary of the opposition party of the Equipment Committee, met with reporters following the meeting and said, “The ruling and opposition parties agree to some extent on the purpose in terms of economic revitalization, but they said that it is a large-scale tax cut of regarding 3 trillion won, so a close examination is necessary.” There was talk of asking for specific data on the effects arising from it,” he explained.
The ruling and opposition parties decided to hold an additional tax subcommittee in the near future to further discuss the amendment.
Meanwhile, the tax subcommittee tentatively approved the plan to increase the income deduction rate for public transportation usage from 40% to 80% of the amount of credit card usage in the government’s amendment bill.
The deadline for income deduction was agreed to be extended by the end of this year, rather than six months, which was originally proposed by the government.
In addition, a provision was tentatively decided to apply the tax credit related to the hometown love donation from January 1 of this year.
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