Jokuk Innovation Party "We Must Change the Wealth Tax Cut Policy... Yoon Government's 84 Trillion and Next Government's 100 Trillion Won Tax Revenue Reduction"

Criticism at the '2025 Budget Proposal Evaluation Meeting'
"Continuing in a Serious Financial Bankruptcy State"

Due to the tax cut policies of the Yoon Suk-yeol administration, it is anticipated that not only the current government but also the next administration will face fiscal difficulties. The government's budget proposal for next year requires an 11.7% increase in tax revenue compared to the actual tax revenue this year, raising concerns about a tax revenue shortfall continuing next year, following last year and this year.

On the 12th, Seo Wang-jin, chairman of the Policy Committee of the Innovation Party, Cha Gyu-geun, vice chairman of the Policy Committee, and Yoon Jae-gwan, deputy director of the Innovation Policy Research Institute, held a briefing at the National Assembly to evaluate the '2025 Budget Proposal.'

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According to the Innovation Party, "Due to the tax cut policies of the Yoon Suk-yeol administration, the next government will experience a tax revenue decrease of 100 trillion won," and criticized, "Compared to the Moon Jae-in administration, which left a fiscal buffer of 6.8 trillion won despite difficult fiscal conditions, this is irresponsible."

The Innovation Party commissioned the Nara Salrim Research Institute to estimate the tax revenue effects of the tax law amendments. As a result, tax revenue decreased by 83.7 trillion won over five years of the current administration due to the tax law changes in 2022, 2023, and 2024. The tax revenue reduction effect will continue into the next government, with estimates reaching about 100.2 trillion won over the next administration's five-year term. Chairman Seo pointed out, "Due to the irresponsible tax cut policies of the current government, whoever takes charge of policy in the next government will inevitably face significant difficulties in fiscal management."

The Innovation Party also questioned the revenue outlook for next year. The government proposed 382.4 trillion won in national tax revenue for next year, which requires an 11.7% increase compared to the tax revenue forecast of 337.7 trillion won that reflects this year's shortfall. Even considering a 4.5% growth rate in the current account balance next year, there is skepticism about a double-digit increase in tax revenue within one year. In particular, regarding corporate tax, the government expects a substantial increase to 88.5 trillion won compared to this year's forecast of 63.2 trillion won, but due to poor corporate conditions in the second half of this year, there are concerns about a reduction in corporate tax revenue.

Vice Chairman Cha introduced, "At the Budget and Accounts Committee, we proposed a rolling forecast method?re-estimating based on actual results?by receiving corporate tax performance data from the Prime Minister and Deputy Prime Minister for Economy and reflecting it in the budget. We received a response that it will be reviewed." Since the third quarter corporate tax revenue has been confirmed, they suggest using this as a basis to reassess next year's tax revenue.

Regarding tax revenue measures, Chairman Seo stated, "The government's fiscal foundation is fundamentally shaken and is leading to a serious fiscal collapse," adding, "The policy direction must change, and the biggest part of this will be reversing tax cuts for the wealthy." He further noted, "When there is a new political and government situation, reform of the Ministry of Economy and Finance must be combined."