Ruling Party and Government Reach Consensus on 53-61% Greenhouse Gas Reduction Target by 2035

Top Dividend Tax Rate May Be Eased from Government's Proposed 35%

The Democratic Party of Korea and the government have reached a consensus on a plan to reduce greenhouse gas emissions by 53-61% from 2018 levels by 2035.

Park Soo-hyun, Chief Spokesperson of the Democratic Party, stated in a briefing on the results of the High-Level Party-Government Consultation held at the National Assembly on the 9th, "Taking into comprehensive consideration the recommendations of the Intergovernmental Panel on Climate Change (IPCC), the decision of the Constitutional Court, the burden on future generations, and the conditions of domestic industries, as well as gathering opinions from public hearings, we have formed a consensus to set the '2035 National Greenhouse Gas Reduction Target (2035 NDC)' accordingly."

Prime Minister Kim Minseok (center) smiles with President's Chief of Staff Kang Hunsik (left) and Democratic Party leader Chung Cheongrae at the High-Level Party-Government Consultation held on the 9th at the Prime Minister's residence in Jongno-gu, Seoul. Photo by Yonhap News

Chief Spokesperson Park explained, "Taking into account the industrial structure centered on carbon-intensive manufacturing, the feasibility of reduction technologies, and the conditions of global competition, we have eased the reduction requirements for the industrial sector. We will actively promote the transition of our companies to decarbonized industries and foster green industries by establishing the 'KGX Green Transition Strategy.'"

He added, "We have also decided to discuss measures to minimize the impact on existing industries such as coal-fired power plants and the internal combustion engine sector, as well as on workers and local communities, during the transition to a carbon-neutral society." The final 2035 NDC will be submitted to the United Nations next week after deliberation and approval by the Presidential Commission on Carbon Neutrality and Green Growth 2050 and the Cabinet this week.

A plan to adjust the top tax rate for separate taxation of dividend income to revitalize dividend payouts in the stock market will also be prepared. While the government originally proposed a top rate of 35%, there is an intention to consider further easing during the National Assembly review process in order to channel market liquidity into the productive sectors of companies. Accordingly, some interpret this as the party and government effectively agreeing on the 25% rate proposed by Democratic Party lawmakers.

Chief Spokesperson Park added, "Regarding measures to enhance the effectiveness of separate taxation of dividend income, we agreed on the need to devise a reasonable adjustment to the top tax rate that would maximize the effect of revitalizing dividends without significantly affecting tax revenue," and "the specific tax rate will be determined through discussions during the regular session of the National Assembly."

This content was produced with the assistance of AI translation services.