On the 9th, it was learned that the government, after beginning to call tax revenue collected above expectations due to the semiconductor boom "additional tax revenue" rather than "excess tax revenue," is pushing to include a clause in a special act on the Future Response Fund to avoid constraints on expenditure targets and prioritization under the National Finance Act. Article 90 of the National Finance Act stipulates that when excess tax revenue arises, it must be used in order for local allocation grant settlements, public fund repayments, and debt repayments. If this rule is followed, the additional tax revenue cannot be sufficiently used for the Future Response Fund for projects such as creating a semiconductor cluster.
The Ministry of Planning and Budget plans to introduce a bill to enact the Special Act on the Establishment and Operation of the Future Response Fund within this month. Earlier, on the 7th, Blue House fiscal planning secretary Ryu Deok-hyeon noted the plan to push the special act, saying, "We will not tie additional tax revenue only to Government Bonds repayment and the like, but will use it as a resource for future investment."
To use additional tax revenue for projects such as creating a semiconductor cluster, either Article 90 of the National Finance Act must be amended or an exception clause must be included in the special act.
The government is currently reviewing a plan to include an exception clause in the special act. Options being discussed include inserting the phrase "notwithstanding the National Finance Act" into the special act. If so, additional tax revenue could be put into the Future Response Fund first, without being used first for local allocation grant settlements, public fund repayments, and debt repayments.
A government official said, "Under the current provisions of the National Finance Act, it is impossible to use additional tax revenue entirely for other purposes such as funds." A legal professional said, "The National Finance Act is a law that sets the principles of managing the national budget, and it seems the government considered that adding an exception clause to it does not fit the legal framework."
At the National Fiscal Strategy Meeting to be held next week, the government plans to unveil a draft of the special act and to reflect the Future Response Fund in the budget starting next year.
Criticism has emerged that this could shake the principles of national finance. Seok Byung-hun, a professor of economics at Ewha Womans University, said, "Once you start creating exceptions, there is concern that the government could create similar funds whenever needed in the future," adding, "It is not desirable in terms of the consistency, predictability, and credibility of fiscal policy."