Ruling and Opposition Parties Fail to Narrow Differences on Financial Investment Tax and Corporate Tax... Ongoing Discussions on Comprehensive Real Estate Tax

Uncertain if Tax Subcommittee of Planning and Finance Committee Will Hold Meeting Today
Discussion Expected on Reducing Comprehensive Real Estate Tax for Single Households with Two Homes of Low Asset Value

Shin Dong-geun, Chairman of the Tax Subcommittee of the National Assembly's Planning and Finance Committee, is presiding over the Tax Subcommittee meeting held at the National Assembly on the 5th. Photo by Yoon Dong-joo doso7@

[Asia Economy Reporter Hyunju Lee] The Tax Subcommittee of the National Assembly's Planning and Finance Committee, which is reviewing the budget-related subsidiary bills, has not been convened. While there remain significant differences in views regarding the Financial Investment Income Tax (Geumtu Tax) and corporate tax, it is reported that an unofficial minor subcommittee meeting has been held to discuss the Comprehensive Real Estate Holding Tax (Jongbu Tax).

The Tax Subcommittee meeting scheduled for the 6th is likely to be canceled. Ryu Seong-geol, the ruling party's secretary of the Planning and Finance Committee and a member of the People Power Party, said in a phone call that "discussions are ongoing," but added, "It is now necessary to reach a conclusion in the meeting, but it is not easy." A Democratic Party official from the Planning and Finance Committee also predicted, "It will be difficult today."

The budget-related subsidiary bills, which affect next year's revenue, are discussed in the National Assembly alongside the budget review. This year, due to significant differences between the ruling and opposition parties regarding the postponement of the Geumtu Tax, corporate tax cuts, and the Jongbu Tax, no easy conclusion has been reached.

Meanwhile, the ruling and opposition party secretaries of the Tax Subcommittee have held a minor subcommittee meeting to negotiate on the Jongbu Tax. The Democratic Party announced that it would push to ease the Jongbu Tax burden for owners of two houses with low asset values. This aims to resolve the issue where owning two small houses under one household still subjects the owner to the Jongbu Tax.

Kim Seong-hwan, the Democratic Party's Policy Committee Chair, said, "Compared to the Jongbu Tax on one household with one house, there is some unfairness in that households with two houses but lower asset value bear an excessive Jongbu Tax burden, so we will minimize this burden."

Most bills that have not been agreed upon are likely to be decided in the minor subcommittee meetings led by the ruling and opposition party secretaries, often without transparency. These minor subcommittee meetings do not keep minutes. There are concerns that, contrary to the principle of tax legality, decisions could be made through political negotiations between floor leaders.