Lee Jae-myung Proposes Bill to Expand Income Tax Deduction for Local Currency Ahead of Chuseok

Lee Proposes Raising Local Currency Income Deduction Rate from 30% to 80%
"Local Currency Positively Impacts Regional Economic Revitalization"
Government Seems Aware of 'Traditional Market Income Deduction Expansion'

Lee Jae-myung, leader of the Democratic Party of Korea, has taken the lead in proposing the "Amendment to the Restriction of Special Taxation Act," which significantly expands the income deduction rate for the amount spent on purchasing local love gift certificates (local currency). This law targets traditional markets and small business owners just one week before Chuseok.

On the 10th, Lee proposed an amendment to raise the income deduction rate for local currency issued by local governments from the current 30% to 80%. This means that people with earned income can receive an 80% deduction when using local currency. The current law provides income deduction benefits for public transportation usage and book purchases. He stated the background of the bill, saying, "Local currency is positively evaluated for revitalizing the local economy by increasing sales and income of traditional markets, small business owners, and self-employed people within the region, creating a virtuous cycle effect."

During the last general election period, Lee Jae-myung, leader of the Democratic Party of Korea, is eating rice cakes handed to him by a merchant in the Jungang Market area of Wonju, Gangwon Province. [Image source=Yonhap News]

Lee’s office explained that the amendment can promote the use of local currency and achieve effects of stimulating consumption and revitalizing the economy. Previously, Lee also took the lead in proposing the "National Support Fund Act (Special Measures Act for the Payment of 2024 Livelihood Recovery Support Fund)," which includes providing local currency worth 250,000 to 350,000 won to all citizens. The National Support Fund Act was submitted as the Democratic Party’s top priority bill in the 22nd National Assembly.

Lee emphasized, "It is necessary to expand income deduction benefits to further promote the use of local currency and contribute to the revitalization of local commercial districts." It is analyzed that he had in mind the government’s recent Chuseok livelihood measure announced on the 28th of last month, which raised the income deduction rate for traditional markets from 40% to 80%.