Three-Year Extension of Acquisition and Property Tax Reductions for Farmers, Fishermen, and Small Businesses

Amendments to Five Local Tax-Related Laws Approved at Cabinet Meeting

[Asia Economy Reporter Jo In-kyung] The government will extend local tax reductions for agriculture, fisheries, small business owners, and vulnerable groups in consideration of the economic downturn caused by the novel coronavirus infection (COVID-19).

The Ministry of the Interior and Safety announced that the 2020 amendments to local tax-related laws, including the Local Tax Basic Act, Local Tax Act, Local Tax Collection Act, Restriction of Special Local Tax Act, and Act on Collection of Local Administrative Sanctions and Charges, were approved at the Cabinet meeting on the 22nd.

First, the amendment to the Restriction of Special Local Tax Act extends the 50% acquisition tax reduction on farmland, forest land, and agricultural facilities for three years. It also extends by three years the 75% acquisition tax reduction when agricultural corporations purchase real estate within two years of establishment for farming purposes, as well as the 50% acquisition and property tax reductions on real estate used for farming, distribution, and processing by agricultural and fishery corporations. Acquisition and property tax reductions for 11 types of small and medium enterprises, including venture business complex facilities, startup incubation centers, and new technology startup complex areas, will also be uniformly extended for three years.

To strengthen the local community safety net, the local tax reduction period for local children's centers, youth facilities, elderly welfare facilities, and national merit recipients will also be extended.

The amendment to the Local Tax Collection Act delegates the authority to dispose of seized goods from high-amount and habitual tax delinquents to customs chiefs, and in cases of tax delinquency in clan organizations, imposes physical tax payment obligations on the nominal trustees if there are nominally entrusted clan properties.

Additionally, the amendment to the Local Tax Basic Act requires that taxpayers be notified of tax audit results within 20 days after the conclusion of the audit to ensure taxpayers can accurately know the timing of the tax audit results, thereby strengthening taxpayer rights protection. It also simplifies the resident tax taxation system and rationalizes the taxation system by unifying the resident tax payment deadline from July and August to August, improving taxpayer convenience.

Furthermore, the efficiency of managing delinquent local administrative sanctions and charges will be enhanced by applying refunds of local administrative sanctions and charges to outstanding debts and expanding the scope of business restrictions for licensed businesses.

The Ministry of the Interior and Safety plans to submit the amendment bill to the National Assembly by the end of this month after presidential approval.

Park Jae-min, Director of the Local Finance and Economy Office at the Ministry of the Interior and Safety, said, "We hope that this amendment to local tax-related laws will help overcome the COVID-19 damage early and revitalize and relaunch the struggling local economy," adding, "We will continue to strive to implement taxpayer-centered taxation by improving unreasonable systems to enhance taxpayer rights."