An Enforcement Decree adding defense industry goods export and supply chain stabilization technologies and artificial intelligence (AI) technologies to the "national strategic technologies" eligible for research and workforce development tax credits passed the Cabinet meeting on the 25th. Prime Minister Kim Min-seok presided over the 51st Cabinet meeting that morning at Government Complex Seoul and reviewed and approved four bills, including a draft amendment to the Enforcement Decree of the Act on Restriction on Special Cases Concerning Taxation (hereinafter the Special Taxation Act), 18 presidential decrees, and three general agenda items.
The current Enforcement Decree of the Special Taxation Act applies tax credit benefits to expenses related to research and development (R&D) and workforce development to strengthen support for advanced strategic industries and future promising industries. The draft amendment included ▲ technologies for defense industry goods exports and supply chain stabilization ▲ AI technologies in the "new growth, source technologies, and national strategic technologies" eligible for tax credits. The move reflects the state agenda of leaping into a "top four power" in strategic technology fields such as defense and AI.
In line with the Lee Jae-myung administration's policy stance, agenda items revised for the purposes of "local decentralization" and "revitalizing the local construction economy" were also reviewed and approved en bloc. Accordingly, an amendment to fix operational shortcomings also passed, including raising the value threshold for dwellings eligible for special taxation on capital gains tax and comprehensive real estate tax in depopulated areas from the current 400 million won or less to 900 million won or less.
The government reviewed and approved draft amendments to the Enforcement Decree of the Income Tax Act and the Enforcement Decree of the Comprehensive Real Estate Tax Act to extend by one year—from Dec. 31 this year to Dec. 31 next year—the acquisition period for "non-capital region" unsold new dwellings after completion that are excluded from heavy capital gains tax for multiple-home owners, and the acquisition period for "non-capital region" unsold new dwellings after completion that are not counted toward the number of dwellings when calculating the dwelling portion of the comprehensive real estate tax.
A bill to amend laws related to the collection of employment insurance and industrial accident compensation insurance premiums also cleared the Cabinet. The main change is to replace the employment insurance coverage criterion from "prescribed working hours" to "remuneration." Without separate filings, insurance premiums will be levied using monthly income information (remuneration) reported to the National Tax Service. The change aligns the basis for calculating workers' job-seeking benefits and insurance premiums, shifting the employment insurance system from an average-wage basis to an income basis.
◇ Basis for operating the "people's recommendation system" specified in presidential decree
An agenda item related to the "people's recommendation system," under which ordinary citizens directly recommend talent for major government posts, also passed the Cabinet meeting. The draft amendment to the regulations on the collection and management of information on public office candidates specifies the basis and procedures for operating the people's recommendation system and expands the scope of local government personnel whose materials the head of the Ministry of Personnel Management may request, from "Grade 4 or higher local public officials" to "Grade 5 or higher local public officials." Local government-funded institutions may also use the information for personnel purposes.
According to the presidential office, first-term cabinet figures of the Lee Jae-myung administration—such as Deputy Prime Minister and Minister of Economy and Finance Koo Yun-cheol; Minister of Health and Welfare Jung Eun-kyeong; and former Deputy Prime Minister for Social Affairs and education minister-nominee Lee Jin-sook—were placed on the list through the people's recommendation system. At the time, the presidential office said it was a system that "allows the public to directly recommend fresh and competent talent to major government posts, including political appointees, to ensure transparency and democracy in personnel affairs."
The Cabinet meeting that day was chaired by Prime Minister Kim in line with President Lee Jae-myung's tour of four countries in Africa and the Middle East. Taking part in the Group of 20 (G20) summit in South Africa, President Lee departed on the 17th to visit the United Arab Emirates (UAE), Egypt, and Türkiye. Having signed agreements with these countries on cooperation in defense, energy, and nuclear power, President Lee will return on the morning of the 26th after completing his 7-night, 10-day itinerary.