Jin-sik Choi, Chairman of Junggyeonryeon, Meets Minister of Industry to Address "Unfair Corporate Succession System"

Announced at the meeting with new Minister of Industry Andeokgeun on the 22nd

Choi Jin-sik, chairman of the Korea Federation of Medium-sized Enterprises, emphasized the need to proactively improve the unreasonable corporate succession system to secure the stability and sustainability of corporate management. Chairman Choi stated this during a meeting with newly appointed Minister of Trade, Industry and Energy Ahn Deok-geun, who visited the federation on the 22nd, saying, "The social awareness of the current inheritance tax, which the president recently pointed out as a surcharge tax, has been a very long-standing issue," and added, "We must break away from political benefits and ideological inertia, thoroughly analyze the realities of inheritance tax and related systems, and boldly improve them in a way that drives economic and social development."

On the 22nd, Choi Jin-sik, Chairman of the Korea Federation of Medium-sized Enterprises (right), and Ahn Deok-geun, Minister of Trade, Industry and Energy, are taking a commemorative photo after a meeting.

Chairman Choi said, "Regardless of the stage of economic development, in a situation where the top tax rate of 50% set 25 years ago plus a surcharge means paying up to 60% inheritance tax, not only challenge and innovation but even the survival of companies themselves is impossible," and emphasized, "In the long term, we should aim to abolish inheritance tax like 15 OECD countries including Sweden, but to respond to the immediate crisis and achieve economic re-acceleration, we must urgently take concrete measures to raise the field’s sense of reality, such as lowering the inheritance tax rate from the OECD’s highest level to below average, significantly expanding the scope of business succession deductions, and further relaxing post-management requirements."

Chairman Choi also stressed the urgent need for financial policy innovation to support expanded R&D for discovering new growth engines, overseas market development, and the creation of quality jobs. He said, "The fact that the credit guarantee limit for medium-sized enterprises has been fixed at 3 billion won for a staggering 26 years since 1998 is a clear example of the policy authorities’ irresponsibility and extremely low policy sensitivity," adding, "To effectively drive investment expansion by medium-sized enterprises, more active measures such as significantly increasing the credit guarantee limit for medium-sized enterprises and establishing dedicated financial programs for them must be implemented."

In response, Minister Ahn said, "Although medium-sized enterprises account for only 1.3% of all companies, they are a core group responsible for 18.2% of exports, 14.4% of sales, and 12.8% of employment," and added, "We will strive to eliminate unreasonable regulations, including killer regulations in R&D and employment sectors, so that medium-sized enterprises can effectively respond to worsening economic conditions such as intensified global supply chain competition and expanded geopolitical risks."