Some of the NXC shares the government received in kind as inheritance tax from the Nexon Group will be converted into cash after three years. That is because the government decided to sell back to NXC about 1 trillion won worth of its NXC shares. Koo Yun-cheol, Deputy Prime Minister and Minister of Economy and Finance, said the sale was concluded at a price higher than the in-kind payment value and noted it would have positive effects on non-tax revenue and foreign currency inflows.
On the 11th, at a press briefing at the Sejong Government Complex, the deputy prime minister announced plans to sell 1.0227 trillion won of the NXC shares received in kind. As a result, the government's equity stake will fall to 25.7% from the initial 30.6%.
Earlier, in Feb. 2023, the government received the heirs' inheritance tax for the late Nexon Group Chairman Kim Jung-ju in the form of NXC "shares." The appraised value was 4.7 trillion won. The government had to convert them into cash to fund non-tax revenue, but four rounds of attempted sales all fell through, becoming a headache.
The deputy prime minister said the in-kind payment value at the time was 5,534,000 won per share, but the sale was concluded at a higher price (5,558,000 won), adding that it appears to be a good sale for the government. He also said a significant portion will be repurchased with overseas funds (foreign currency), which is expected to help stabilize the foreign exchange market, and securing more than 1 trillion won in non-tax revenue will greatly aid fiscal management.
Meanwhile, the deputy prime minister highlighted the Korea Composite Stock Price Index (KOSPI) ranking seventh worldwide by market capitalization, Korea ranking fifth in exports in Jan.–Feb., and stable prices and credit ratings, saying the economic growth rate for Korea this year is expected to exceed 2%, with the degree of the semiconductor boom and the impact of the Middle East war being key.
He went on to emphasize the role of the budget as a "wise investor." The deputy prime minister said bold investments to prepare for the future must be made, adding that if the growth rate improves through proactive investment spending, the liability ratio will fall and revenues will rise, reducing the fiscal deficit. If that happens, fiscal soundness will actually be strengthened.
He added that in the past, being too frugal with the budget led to a failure to invest in discretionary spending, tax revenues fell, and a vicious cycle of a larger fiscal deficit emerged, and he would reverse that, but the government would by no means run the budget in a lax and inefficient manner.
The deputy prime minister cited the green transformation (GX) and the AI transformation (AX) as examples of "wise investment," saying wise investment is not a matter to be judged by the size of the budget and asking the public to look at what the government is investing in.