Choi Jin-sik, chairman of the Korea Federation of Small and Medium Enterprises, argued on the 25th for progressive regulatory innovations that could restore the vitality of corporations, including easing inheritance taxes.
On this day, Chairman Choi noted at the 'Emergency Committee Meeting for Medium-sized Enterprises with Kwon Young-se, Chairman of the People Power Party,' that "in the face of imminent signs of crisis, there is no hope to be found in the reality where amendments to commercial law that erode the value of corporations are being pushed forward while ignoring the highest level of inheritance tax relief among Organisation for Economic Co-operation and Development (OECD) countries."
Chairman Choi said, "The proposal to lower the highest inheritance tax rate, first driven at the end of last year, was once again thoroughly thwarted at the National Assembly, while the amendment to the Commercial Act, which is clearly going to hinder long-term investment and innovation by expanding the duty of care for directors to shareholders, passed the National Assembly in defiance of the industry's urgent appeals." He emphasized that "considering the critical importance of corporate activities that drive the economy, if measures that weaken corporate competitiveness while undermining the foundation of national wealth creation continue, the future outlook for South Korea will inevitably be bleak."
Chairman Choi stated, "The act of severing the management of many competitive corporations with the highest effective inheritance tax rate among OECD countries and handing them over to foreign capital is an act of foolishness and irresponsibility, like catching a goose instead of waiting for a golden egg to solve a day’s meal." He argued that "to overcome the economic crisis, it is necessary to boldly exceed the limitations of recent discussions about inheritance tax reform focused only on relief for individual taxation and reduce the highest tax rate to 30%, on par with advanced OECD countries, to invigorate the economy and expand quality jobs."
Chairman Choi also said, "The amendment to the Commercial Act, which undermines the stability of corporate management and deprives all attempts to enhance competitiveness under the slogan of value-up, must be re-evaluated from square one." He added, "Shareholder value should not be acquired through preferential treatment disguised as 'responsibility,' but should be reached through corporate development and national economic growth achieved by bold challenges such as entering new business ventures and investing in innovation."
The meeting was attended by Chairman Choi Jin-sik and Kwon Young-se, Chairman of the People Power Party's Emergency Committee, along with Kim Sang-hoon, Chairman of the Policy Committee, Song Eon-seok, Chairman of the Planning and Finance Committee, Lee Yang-soo, Secretary-General, Park Seong-min, Secretary of the Committee on Small and Medium Enterprises in the Ministry of Trade, Industry and Energy, Koo Ja-geun, Secretary of the Special Committee on Budget and Accounts, Jung Gwang-jae, Spokesperson, as well as Lee Se-yong, Chairman of Elentec, Park Jin-seon, President of Sempio Foods, Park Il-dong, Chairman of Zeus, Cho Yeon-ho, Executive Vice President of Hankuk Carbon, and Lee Ho-jun, Executive Vice Chairman of the Federation of Small and Medium Enterprises.
The Federation of Small and Medium Enterprises delivered the '10 Key Challenges for the Medium-sized Corporate Sector,' which includes recommendations for improving the foundations for the sustainable growth of corporations, enhancing the quality of workers' lives, increasing employment flexibility, easing governance regulations, and strengthening support for medium-sized enterprises, to Kwon Young-se, Chairman of the People Power Party's Emergency Committee.