Collapse of Tax Base, Distorted Expenditures, and Worsening Fiscal Soundness
97 Trillion Won Tax Revenue Shortfall Over 3 Years, 1 Million Self-Employed Businesses Closed
"A Devastating Outcome Caused by Mismatched Policy Measures"
Ando Geol, a member of the Democratic Party of Korea, is speaking at the National Assembly Budget and Accounts Special Committee on the 25th. Photo by Ando Geol's office
Ando Geol, a member of the Democratic Party of Korea representing Gwangju Dongnam-eul, stated at the National Assembly Budget and Accounts Special Committee on the 25th, "In terms of revenue, expenditure, and fiscal soundness, the Yoon Suk-yeol administration's 2024 national finances were a textbook example of policy failure." He emphasized, "Fiscal policy must fulfill its strategic role in line with the demands of the times and the people, and transform into finances that foster growth and welfare felt by the public by strengthening democracy and transparency."
Assemblyman Ando focused on highlighting the problems in the management of the 2024 national finances, analyzing that the tax revenue shortfall of 97.5 trillion won over the past three years and a tax burden ratio of 17.6% demonstrate a serious fiscal crisis.
Notably, in 2024, earned income tax exceeded corporate tax for the first time. Assemblyman Ando interpreted this as a simultaneous collapse of the tax base and tax equity.
On the expenditure side, he criticized the government for its ultra-austere fiscal management. He pointed out issues such as a 0.1% decrease in total expenditure compared to the previous year, a 4.6 trillion won cut in the R&D budget, and a reduction in job opportunities for young researchers.
He particularly emphasized the indiscriminate withdrawal of 67.4 trillion won from the Foreign Exchange Stabilization Fund over two years and problems in the management of the Industrial Accident Compensation Fund. The economic situation is also dire, with four consecutive quarters of negative growth, the closure of over one million self-employed businesses, and a sharp increase in delinquency rates on loans to the self-employed, all highlighting the difficulties faced by ordinary citizens.
Meanwhile, Assemblyman Ando proposed the creation of a 100 trillion won National Innovation Fund, transparent fiscal management, and mid-term fiscal soundness management as alternatives.
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