Koo Yoon-cheol, the Deputy Prime Minister and Minister of Economy and Finance nominee, stated that appropriate taxation is necessary for dwelling rental income and that tax incentives such as separate taxation are needed to encourage an increase in dividends for corporations. He also expressed the view that the corporate tax rate in Korea is at a lower level compared to major countries and explained that taxation on virtual assets should primarily focus on capital gains.
In a written response submitted to the National Assembly on the 15th, Koo noted, "I agree that it is necessary to impose appropriate taxation on dwelling rental income for tax equity." However, he added, "There are concerns about the increased tax burden on small-scale rental business owners, such as retirees, and the potential for passing on rental costs, so we need to approach the issue of tax strengthening cautiously."
Regarding the separate taxation system for dividend income, he mentioned, "Tax incentives that can encourage an increase in corporations' dividends are needed to advance the capital market and support the public's asset formation." However, he responded, "Regarding the criticism that the tax benefits are focused on high-income earners, I will look into whether there are measures that can contribute to revitalizing the capital market while addressing the issue. "
On the topic of reduced dividends, he stated, "Because they are not materially different from general dividends and have been pointed out as being abused for tax avoidance, we will prepare improvement measures considering tax equity and enforceability."
Concerning the taxation method for virtual assets, Koo remarked, "Considering the principle of 'taxing income where it is earned,' taxing capital gains as reflected in the income tax law is desirable," adding, "I will actively participate in related discussions in the National Assembly regarding the virtual asset taxation that has been postponed until 2027."
Regarding the current corporate tax level, Koo stated, "Compared to countries with a similar economic scale among OECD nations, I understand that the total corporate tax rate, including local government tax, is somewhat low." However, he did not specifically mention the possibility of adjusting the tax rate in the future.
On the issue of changing the taxable units for income tax from the current individual basis to a unit centered on couples or families, he stated, "This is a matter that fundamentally changes the tax system and has a significant ripple effect," adding, "Since national consensus must precede, it needs to be reviewed cautiously."
Regarding the introduction of a price-linked system for income tax, he responded, "We need to make a judgment based on a comprehensive consideration of the impact on the tax base, equity, and financial conditions."
On the differential application of local tax rates, he expressed a negative stance, saying, "Because national taxes are generally applied uniformly across the country, differentiated tax rates by region can lead to conflicts between regions or equity issues between workers and corporations."
Regarding the comprehensive real estate tax, he stated, "We need to consider the impact on the market and the principle of ability to pay comprehensively."
Concerning discussions on reforming the inheritance tax system, he noted, "The government has submitted a bill aimed at introducing an estate acquisition tax, and this should be decided after a comprehensive review of the financial conditions and beneficiaries during the National Assembly discussions."
On the need for introducing an excess profit tax (commonly known as a windfall tax), he stated, "We need to consider the equity of taxation among different sectors and the impact on the overall market," adding, "I have heard that some foreign countries that have introduced this tax are also concerned about its impact on the real economy."
Regarding the issue of raising the threshold amount for the simplified value-added taxes from the current 1.04 billion won, Koo noted, "The threshold has been expanded more than twice over the past three years," adding, "The possibility of additional increases should be reviewed cautiously."