Jo Incheol: "Tax Incentives to Promote Corporate Attraction"

Proposal of the "Urban Convergence Special Zone Financial Support Act"
Reduction of Corporate Tax, Income Tax, Acquisition Tax, and Property Tax

Jo Incheol, Member of the National Assembly.

Jo Incheol, a member of the Democratic Party of Korea (representing Gwangju Seo-gu Gap), announced on the 25th that he has proposed amendments to the "Restriction of Special Local Taxation Act" and the "Restriction of Special Taxation Act" to promote the attraction of companies to Urban Convergence Special Zones.

The Urban Convergence Special Zone is an innovation hub designated by the government to alleviate overcrowding in the Seoul metropolitan area and foster major regional cities as centers of advanced industries. In 2020, five metropolitan cities?Gwangju, Daegu, Daejeon, Busan, and Ulsan?were selected. The core of the project is to redevelop old downtown areas into spaces that combine industry, residential, cultural, and research functions. However, there has been criticism that more practical incentives are needed, as active participation from companies has been lacking so far.

The proposed amendments focus on supporting the initial settlement of companies by reducing acquisition tax, property tax, corporate tax, and income tax for start-ups and foreign-invested companies moving into the Urban Convergence Special Zones.

In particular, while existing local investment attraction policies mainly targeted large corporations, the amendments expand support to include start-ups and foreign-invested companies, ensuring that small and venture businesses also receive tangible benefits.

Additionally, to prevent companies from simply taking advantage of tax benefits and then leaving, a provision has been included to reclaim reduced taxes from companies that withdraw within a certain period. The goal is to create a virtuous cycle of attracting companies, creating jobs, increasing population, and revitalizing the local economy.

Jo stated, "For Urban Convergence Special Zones to become innovation hubs that revive the local economy, companies must move in and people must gather. Through these amendments, we will promote start-ups and investment, and provide substantial support so that Urban Convergence Special Zones can become the central axis of balanced regional development."

Jo further emphasized, "Since Sangmu District in Gwangju Seo-gu has been designated as an Urban Convergence Special Zone, we will not only pursue legislative amendments but also prepare various policies to attract companies and bring in young people through active cooperation with the government. We will do our utmost to help Gwangju emerge as a center for youth start-ups and investment."