Choo Kyung-ho "Next Year's Economy Will Be More Difficult Than This Year... Tax Reform Bill Passage Is Urgent"

Deputy Prime Minister and Minister of Economy and Finance Choo Kyung-ho (center) is speaking at a meeting held on the 1st at the Korea Federation of Small and Medium Business conference room in Yeongdeungpo, Seoul. (Photo by Ministry of Economy and Finance)

[Asia Economy Sejong=Reporter Son Seon-hee] Deputy Prime Minister and Minister of Economy and Finance Choo Kyung-ho appealed on the 1st, "I earnestly ask the National Assembly to swiftly discuss next year's budget and tax reform plan and pass them within the deadline (December 2nd)."

On the morning of the same day, Deputy Prime Minister Choo held a meeting with small and medium-sized enterprise (SME) representatives at the Korea Federation of SMEs conference room in Yeongdeungpo-gu, Seoul, and said, "Next year's economy is expected to be more difficult than this year. If the passage in the National Assembly is delayed, subsequent procedures such as business plan announcements and securing local government funds will also be delayed, causing setbacks in the early execution of the government-prepared budgets for livelihood, jobs, and SME support." He added, "As the difficulties of ordinary people are intensifying and there is a high risk of disruption to economic recovery, it is urgent to finalize the budget within the legal deadline," emphasizing this repeatedly.

The legal deadline for the processing of next year's budget and tax reform plan, which the government submitted to the National Assembly last September, is midnight on the 2nd.

The meeting was arranged to gather opinions from the SME sector ahead of the announcement of the '2023 Economic Policy Direction' scheduled for the end of this month.

Deputy Prime Minister Choo expressed concern, saying, "The current domestic and international economic situation is very severe and urgent. Following the decline in exports in October for the first time in 24 months, the upcoming November export figures are expected to show a larger decrease than October, and a significant level of trade deficit is expected to continue."

He also said, "SME exports, vulnerable to the global economic slowdown, have been declining since June and are in an even more difficult situation. If the planned strikes such as the Cargo Solidarity's collective transport refusal and railway strikes materialize, they could act as additional downward factors."

Deputy Prime Minister Choo stated, "The Cargo Solidarity's collective transport refusal is causing serious adverse effects on overall corporate activities, including logistics stoppages, raw material and parts procurement, production, and export disruptions. Especially, export SMEs are greatly concerned that if the current situation prolongs, delays in cargo import and export will increase transportation costs and even lead to order cancellations from overseas clients." He urged again, "We strongly urge the Cargo Solidarity to immediately withdraw the collective transport refusal and promptly return to the field. If we do not respond strictly to this unjustified and illegitimate collective action, overcoming the economic crisis will be impossible, and there will be no future for the Republic of Korea," warning strongly.

Regarding the 'Delivery Price Linkage System,' which reflects raw material price increases in delivery prices and recently passed the relevant standing committee, Deputy Prime Minister Choo said, "I hope the system will be successfully established and help alleviate the burden of raw material price fluctuations on delivery companies." He also commented on the government's proposed reform of the business succession tax deduction system, saying, "If the National Assembly discussions conclude well, it is expected to reduce the tax burden on business succession companies, and through this, we hope that investment and jobs will be actively created in the applicable SMEs."

Deputy Prime Minister Choo stated, "Going forward, the government will strengthen its role as a support pillar for SMEs vulnerable to the economic crisis and will steadily promote fundamental innovation growth support policies. We plan to steadily implement measures to resolve financing difficulties caused by interest rate hikes, strengthen support to boost export vitality, and continuously discover policy tasks for regulatory reform and competitiveness enhancement."