According to the Ministry of Economy and Finance on the 15th, last year and the year before, tax revenues fell short by 56.4 trillion won and 30.8 trillion won, respectively, compared to the budget proposal. The slowdown in real estate transactions and the poor performance of major companies, including semiconductors, led to a deficit in corporate tax revenues for two consecutive years. The scale of the corporate tax revenue shortfall is projected to be 24.6 trillion won in 2023 and 15.2 trillion won in 2024, accounting for nearly half of the overall tax revenue shortfall.
The nominee also pointed out in his confirmation hearing response that "there are aspects in which the revenue base has weakened due to economic slowdown and corporate tax rate cuts in the previous government."
He expressed a flexible stance on the fiscal soundness and fiscal rules emphasized by the previous government. He stated, "I understand that various discussions regarding the relaxation of standards are taking place in several countries currently operating (fiscal) rules due to changes in the global economic environment," and added, "Both the role of fiscal policy in responding to the economy and sustainability are important values."
Regarding the proposal to reform the inheritance tax system, which has been in place for 75 years since its introduction in 1950, into an inheritance acquisition tax that taxes based on the inherited property, he showed a reserved position. He said, "I understand that there are various opinions for and against the introduction of the inheritance acquisition tax," and added, "It is a matter that needs to be comprehensively reviewed and decided based on diverse opinions from various sectors." As a result, the amendment to the Inheritance and Gift Tax Act submitted to the National Assembly during the previous Yoon Suk-yeol administration is likely to be excluded from this year's tax law amendment discussions.
The nominee also expressed opposition to the introduction of an excess profit tax (commonly known as a windfall tax). He stated, "The introduction of an excess profit tax needs to consider the tax equity among industries and the overall impact on the market," and added, "I understand that there are concerns about the impact on the real economy in some foreign countries that have introduced excess profit taxes." Regarding the introduction of a 4.5-day workweek, he mentioned, "There is a need to improve the long working hours practice," but also stated, "While a 4.5-day workweek is effective in reducing working hours, it has a significant impact on labor costs and industrial sites, so it needs to be gradually introduced through social consensus."
Regarding the Korean won stablecoin, which is causing friction between commercial banks and the Bank of Korea, the nominee stated, "I understand that there are views seeing the introduction of a won stablecoin as an innovation opportunity, as well as concerns about its potential impact on monetary policy and financial and foreign exchange markets," and added, "We will closely examine the various economic impacts of introducing stablecoins with relevant agencies and determine the policy direction."
[Reporter: Moon Ji-woong]
