Yoon: "Abolishing 18 'Shadow Tax' Levies... 2-Year Suspension of 263 Regulations" (Comprehensive)

Presiding Over the Emergency Economic and Livelihood Meeting
Reduction of 14 Charges Including Departure Payment Tax
42 Trillion Won Supplied to Alleviate Small Business Management Difficulties

President Yoon Suk-yeol announced on the 27th that he will "reorganize the levies known as 'shadow taxes' and strengthen the management system." Since levies have sparked controversies over double taxation, the plan centers on abolishing 18 types of levies at once and reducing 14 types that are difficult to abolish immediately.

On the afternoon of the same day, President Yoon presided over an emergency economic and livelihood meeting at the Yongsan Presidential Office, stating, "There are many levies imposed that people are not even aware of, despite being burdensome like taxes."

The government's measures to abolish and reduce levies are actions following President Yoon's directive to review levies from scratch. Earlier, on January 16, at the Cabinet meeting, President Yoon instructed, "All ministries should review all levies from a zero base."

President Yoon emphasized, "In the past 20 years, only 11 levies have been reduced," and pledged to abolish 18 levies at once, including levies on movie theater tickets and school land levies.

In addition, 14 levies will be reduced. For example, the current departure tax of 11,000 won will be lowered to 7,000 won, and the exemption target will be expanded from under 2 years old to under 12 years old. Also, the levy for the Power Industry Infrastructure Fund, which is currently imposed at 3.7% of electricity bills, will have its rate gradually reduced by 1 percentage point.

President Yoon stressed, "The government will ensure that the abolition and reduction of levies do not shift the burden onto taxpayers by streamlining the expenditure structure of projects previously funded by levies, and will support essential projects such as the film industry and fostering young farmers without disruption, even if it means using the general account."

[Image source=Yonhap News]

To ease the burden on small and medium-sized enterprises (SMEs) and small business owners, 263 regulations will be temporarily suspended for two years. President Yoon promised, "We will swiftly ease regulations that burden SMEs and small business owners," adding, "The use of Onnuri gift certificates will be expanded to 'alleyway shopping districts,' and if it is proven that employers have thoroughly managed foreign workers who illegally left, they will be exempted from future personnel allocation disadvantages to prevent unfair treatment of employers."

Regarding everyday regulations, to alleviate housing insecurity among young people, the residence period for youth and newlyweds in Happy Housing will be extended from a maximum of 6 years to 10 years. President Yoon first stated, "We will quickly remove location and facility regulations that hinder corporate investment and growth," mentioning the relaxation of height restrictions in semiconductor industrial complexes, improvements to foreign worker employment regulations, and improvements to the inspection cycle for new passenger cars.

Furthermore, to resolve management difficulties for SMEs, a total of 42 trillion won will be supplied. In this regard, President Yoon referred to the ongoing interest rate reduction plan worth 2.3 trillion won, stating, "The banking sector is preparing a support program worth about 600 billion won for vulnerable groups." In his closing remarks, President Yoon emphasized, "It is important to support small business owners so that they do not lose their will to operate due to financial tightening and can continue to work with courage."

He also stated the policy to thoroughly manage risks related to real estate project financing (PF) while supplying sufficient funds to viable normal projects.

Additionally, the government ordered the discovery of economic policies focused on people's livelihoods and urged active promotion so that the public can be informed about the abolition and reduction of levies and the suspension of regulations. In his closing remarks, President Yoon said, "The abolition or reduction of levies and deregulation were actually things that could have been done relatively easily if the will was there," and pointed out, "Especially, the abolition of these levies seems to have been irresponsibly neglected over decades of government administrations."

He continued, "The public should be aware of the abolition and reduction of levies and the two-year suspension of 263 regulations," emphasizing, "Government policies should clearly communicate to the public that we value this liberal market system and that the government solves problems through it."