World Economic Organizations Federation General Assembly Held... FKI Urges Active Response to Minimum Corporate Tax Introduction Moves

[Asia Economy Reporter Jeong Hyunjin] The Federation of Korean Industries (FKI) attended the World Business Council (GBC) General Assembly on the 14th and condemned excessive government regulations, including the introduction of a global minimum corporate tax rate.

The GBC General Assembly was held virtually on the same day under the theme of "Overcoming the Pandemic Economic Crisis." This council is an international cooperative body of purely private economic organizations representing 15 countries worldwide, including the United States, the United Kingdom, Germany, and France, with the FKI being the only participant from East Asia.

On this day, FKI Vice Chairman Kwon Tae-shin emphasized the concerns at the global economic organization level regarding the recent proposal by U.S. Treasury Secretary Janet Yellen to introduce a global minimum corporate tax rate, stating, "This is a measure that suppresses free economic activities at a time when companies are fighting to survive amid the COVID-19 economic crisis."

Recently, the Biden administration in the United States pledged to raise the corporate tax rate from the current 21% to 28%, gaining the consent of European governments facing fiscal pressure due to COVID-19 financial expenditures. Since the current Korean government took office, the highest corporate tax rate has been raised from 22% to 25%, and including local taxes, the highest corporate tax rate is 27.5%, which is relatively high compared to the OECD average of 23.5%, the FKI explained.

Vice Chairman Kwon diagnosed that the COVID-19 crisis led countries to pursue prioritization policies, damaging the free trade order, and that the government sector has expanded excessively, suppressing economic freedom and corporate activities. He particularly noted that the intense confrontation between the United States and China does not help the global economy, which has been hit by COVID-19, to recover. He added that the global economy should be operated under the rule of law that shares core values such as liberal democracy, market economy, human rights, and intellectual property rights, rather than the logic of power, and that there should be a shared awareness to firmly condemn violations.

Meanwhile, at this General Assembly, a joint statement titled "Urging the Facilitation of International Mobility of Businesspeople," proposed by the FKI and under discussion, was adopted. The joint statement called for △ international cooperation to ensure smooth vaccine supply △ freedom of international mobility for businesspeople based on vaccine certification and COVID-19 testing △ restoration of trade restrictions implemented due to COVID-19.

At this General Assembly, the CEO of an Australian economic organization began a two-year term as the new chairperson this year, and IMF Director Mahmoud Mohieldin presented the current status and outlook of the global economy. Additionally, it was resolved to hold the General Assembly next year in Seoul, where face-to-face meetings are expected to be possible.

FKI International Cooperation Director Kim Bong-man said, "Since each country's vaccine distribution status and the situation regarding the introduction of vaccine passports differ, the agenda related to the freedom of international mobility, which the FKI initially proposed, has somewhat softened. However, economic organizations worldwide have unanimously requested the normalization of international business activities to international organizations such as the World Trade Organization (WTO), B20, OECD, and governments around the world."