Kweon Seong-dong, the floor leader of the People Power Party, noted on the 16th that even before an agreement on 'reducing the top inheritance tax rate,' both the ruling and opposition parties could first discuss expanding the inheritance tax deduction limit, as they have already formed a consensus. This is expected to accelerate discussions on inheritance tax reform, which had stalled over the issue of 'reducing the top tax rate.'
During a press briefing held in the National Assembly that afternoon, Kweon said in response to a question asking, "Are you opposed to adjusting the deduction limit without an agreement on reducing the top inheritance tax rate?" that "Even prior to an agreement on reducing the inheritance tax rate, I am open to discussing the expansion of the deduction limit."
There is no significant disagreement between the ruling and opposition parties on expanding the inheritance tax exemption limit. At the end of last year, during a review of tax legislation by the Subcommittee on Taxation under the Ministry of Economy and Finance, there was a preliminary agreement to raise the spousal deduction from the current 500 million won to 1 billion won. As voices to align inheritance tax with the rising housing prices of APT. in Seoul have grown, the Democratic Party, which had been opposed, is now positively considering expanding the inheritance tax deduction limit.
However, opinions diverge regarding the reduction of the top inheritance tax rate. The ruling party believes that discussions should also include reducing the top inheritance tax rate (from 50% to 40%). The government included the reduction of the top inheritance tax rate alongside expanding children's deductions (from the current 50 million won per person to 500 million won), eliminating the 20% additional valuation of major shareholders' stocks, and doubling the deduction limit for value-up outstanding companies in last year's draft amendment to the inheritance and gift tax law.
Kweon emphasized, "The top inheritance tax rate in our country is 50% for individual inheritance tax, which is excessively high compared to other countries. Therefore, the government and ruling party proposed to rationally adjust this, but the Democratic Party is still rejecting it. Our country is among the top 10 economic powers in the world, so we must conform to global standards."
On the other hand, the opposition party is advocating for a comprehensive deduction for inheritance tax and prioritizing the spousal inheritance deduction in tax reform. They view the reduction of the top tax rate as effectively a 'tax cut for the wealthy.'
Earlier, Park Chan-dae, the floor leader, noted during a press briefing that, "Even when considering the 2025 tax reform proposal, we have continued efforts to reflect the expansion of the deduction limit, but the People Power Party has only focused on lowering the top inheritance tax rate or pursuing a tax cut for the ultra-wealthy." He added, "The ruling party should not insist solely on the ultra-wealthy tax cut policy and should discuss applying inheritance tax appropriately so that ordinary people and the middle class can broadly benefit."
Discussions on inheritance tax reform are expected to gain momentum starting with the 'expansion of the deduction limit.' Kwon Soo-min, the spokesperson for the People Power Party, stated, "Raising the deduction limit to alleviate the burden on the middle class and the reduction of the top tax rate to facilitate wealth transfer are key tasks for the government and ruling party. This is something that the Democratic Party has overlooked until now," and he added, "They will not refuse to expand the deduction limit on the condition of reducing the top tax rate." He further expressed, "It is very welcome that the Democratic Party is now considering raising the deduction limit; that part will be discussed promptly."