Hong Nam-ki "Response Plan for National Debt Increase? Strengthening Revenue Base by Revising Tax Exemptions"

Concerns Over National Debt Arise After 19.5 Trillion Won Damage Support Plan Announcement
"All Measures Including National Budget Restructuring Will Be Prepared"

Hong Nam-ki, Deputy Prime Minister and Minister of Economy and Finance, is briefing on the 2021 supplementary budget at the Government Seoul Office in Jongno-gu, Seoul, on the 2nd. Photo by Moon Ho-nam munonam@

[Sejong=Asia Economy Reporter Kim Hyunjung] Hong Nam-ki, Deputy Prime Minister and Minister of Economy and Finance, mentioned 'strengthening the revenue base,' including the adjustment of tax-exempt sectors, as a response to the increase in national debt during the process of preparing an additional supplementary budget (supplementary budget) worth 15 trillion won to support COVID-19 damage relief.

On the afternoon of the 2nd, Deputy Prime Minister Hong appeared on Yonhap News TV's News Watch and, when asked by the host about measures to address the increase in national debt during the supplementary budget preparation process, said, "We will focus on strengthening the revenue base by enhancing taxation on undeclared income and adjusting tax-exempt areas."

He explained, "The government also sees the need to establish fiscal rules and has already submitted related legislative amendments to the National Assembly," adding, "Furthermore, it is important to restructure the national budget, which amounts to 550 trillion won, to be productive and efficient." He continued, "From my position in charge of finance, the increase in national debt is a concerning issue," emphasizing, "We will prepare and respond with all possible measures within the executive branch."

Regarding the necessity of universal disaster relief payments raised mainly in the political sphere, he maintained a negative stance. Deputy Prime Minister Hong said, "Currently, the most critical and prioritized matter is to promptly execute the supplementary budget and damage relief measures already announced by the government. The scale and content afterward should be comprehensively judged based on how quarantine measures are implemented, economic trends, and fiscal conditions," adding, "However, since the resources are inevitably limited, I believe selective support is more desirable and effective than universal support."

Regarding the timing of the execution of the 19.5 trillion won damage relief measures announced that day, he said, "The supplementary budget bill will be submitted to the National Assembly the day after tomorrow (the 4th) and budget deliberations will begin next week," adding, "If support for small business owners is confirmed by the National Assembly around mid-March, payments can begin from the end of March." He further added, "Those who previously received benefits will be paid more quickly within March, and newly added recipients will undergo various verification processes such as income confirmation, so payments will be made by April or early May."