As the government prepares a tax reform plan centered on 'restoring corporate tax to 25%' and dividends separate taxation by the end of this month, the Presidential Office noted on the 24th that "we should view this as a recovery of tax equity and a normalization of taxes." The Ministry of Economy and Finance recently reported to President Lee Jae-myung a proposal to raise the corporate tax rate from 24% to 25%, which means restoring the tax cuts implemented during the Yoon Suk-yeol administration, indicating that it is not a 'corporate tax increase.'
Spokesperson Kang Yu-jeong stated during a briefing on the results of the president and senior secretary meeting that "there has been an excessive shortfall in tax revenue during the previous administration due to the trend of tax cuts for the wealthy." She further commented, "It would be good to see this as a concept of normalizing taxes back to before the tax cuts for the wealthy," adding that "the terminology itself should be changed. It is not a corporate tax increase but a normalization of taxes."
However, regarding President Lee's mention of 'dividends income tax system reform' in his opening remarks, there was no immediate answer to criticisms from within the ruling Democratic Party of Korea about the 'tax cuts for the wealthy.' While the Lee Jae-myung administration is restoring the corporate tax increase and reversing the 'tax cuts for the wealthy' from the previous Yoon Suk-yeol government, there are analyses suggesting that the tax policy direction somewhat contradicts the introduction of dividends separate taxation, which concentrates tax benefits on a small number of major shareholders statistically.
Earlier, President Lee chaired the senior secretary meeting and stated, "Improving the capital market system has a dual effect of increasing investment in innovative growth corporations while also increasing the income of ordinary individual investors." He emphasized that "the dividends income tax system reform needs to be discussed from this perspective." This statement also directly expressed President Lee's willingness to introduce dividends separate taxation, declaring the '5000 era of KOSPI.'
President Lee added, "There is nothing as important as the issue of making a living. The economy of the country survives when corporations thrive, and more citizens need to invest for corporations to survive." According to current law, financial income such as dividends and interest is taxed at a rate of 15.4% only for annual incomes below 20 million won. However, incomes exceeding 20 million won are subject to comprehensive taxation with a maximum progressive tax rate of 49.5%. The government is reviewing a plan to lower this tax rate to around 30%. Within the Democratic Party, there are claims that a significant portion of dividends income goes to major shareholders, thus labeling it as the "definitive tax cut for the wealthy."