Revealed at the Korea Chamber of Commerce Jeju Forum Keynote Speech
"Considering Changes to Reflect Economic Conditions"
"Family Business Succession to Support Corporate Succession"
Choi Sang-mok, Deputy Prime Minister for Economy and Minister of Strategy and Finance, stated on the 17th at the 'KCCI Jeju Forum' policy lecture held at the Shilla Hotel in Jeju, "We plan to announce the tax law amendment bill within this month," adding, "We are in the final stages of consideration to ensure that changes in the economy are properly reflected in the deductions and tax rates related to inheritance tax."
Choi Sang-mok, Deputy Prime Minister and Minister of Economy and Finance, is delivering the keynote speech at the 'KCCI Jeju Forum' held at Shilla Hotel Jeju on the 17th. Photo by Korea Chamber of Commerce and Industry
At the forum, Deputy Prime Minister Choi responded to a question from an attendee about the possibility of inheritance tax reform by saying, "When the tax system is too outdated, various distortions occur, and there have been many behavioral changes among economic agents," and added, "I think inheritance tax is one of them. Since there has been no change for 25 years, there have been many requests." He continued, "Since tax matters such as inheritance tax are legislative issues, we cannot ignore the need for public consensus."
Earlier in his lecture, Deputy Prime Minister Choi also mentioned, "The announcement of the tax law amendment bill will be soon." He said, "I think we need to reflect changes in various environments," citing Germany as an example. Choi explained, "Germany operates a corporate succession support system rather than a family business inheritance system," and added, "Even if my son does not become the CEO and a professional manager takes over, if employment and investment increase and the company can last longer, the government supports the succession of the company." He further stated, "I believe the system should shift toward supporting corporate succession itself."
The business community has continuously voiced the need for changes to the current highest inheritance tax rate, which can reach up to 60% including surcharges, imposed on large conglomerate owners, as well as the deduction methods. It is reported that since the end of last year, the government has been reviewing a shift to an 'inheritance acquisition tax' system, which taxes the assets acquired by each heir individually. Deputy Prime Minister Choi’s remarks at the Jeju Forum, attended by many business leaders, are interpreted as a broad declaration that a conclusion on this matter will soon be reached.
Meanwhile, regarding the amendment of the Commercial Act provisions that define the 'duty of loyalty of directors,' which is being discussed as part of corporate value-up policies, Deputy Prime Minister Choi said, "The conclusion that businesspeople worry about will not be reached." He added, "There is a need for discussion, and government officials are well aware of the side effects," and continued, "With further discussion and experts breaking down alternatives, I think a reasonable direction can be found."
Regarding the future direction of government policy, he emphasized 'economic security' and 'dynamic economy.' Deputy Prime Minister Choi said, "What I felt while attending the summit was economic security," emphasizing, "Economy and security are one. Ultimately, without security cooperation between countries, there can be no advanced economy or advanced industries." Regarding the dynamic economy, he said, "The Miracle on the Han River and the Korean-style economy have been possible because of the dynamism of the Korean people and companies," and stressed, "I believe there is no other way but to redesign policies and systems to allow our inherent dynamism to manifest. What I think of as dynamism is properly reforming entrepreneurship."
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