President Lee Jae-myung said on the 15th at a joint briefing by the Ministry of Economy and Finance and the Ministry of Planning and Budget, "Fiscal expenditure (budget formulation) and tax expenditure (tax exemption and reduction) are closely related, so let's consider whether it makes sense for the two ministries to split the work." After the government's organizational reshuffle, the Ministry of Planning and Budget has handled budget formulation, while the Ministry of Economy and Finance has overseen tax exemptions and reductions.
At the briefing, President Lee, after hearing the Ministry of Planning and Budget's mid- to long-term development plan and strategic resource allocation report, said, "We are talking about restructuring expenditure and fiscal planning, but isn't the area of tax expenditure under the Ministry of Planning and Budget's purview not now, and instead handled by the Ministry of Economy and Finance?" He added, "Tax expenditure is also likely to be highly related to economic planning, so we need to consider whether it is right that the work is split."
Lee went on to say, "'Tax expenditure' that cuts or exempts taxes ultimately means not collecting taxes that would otherwise be collected, so it is effectively the same as 'expenditure,'" adding, "Because fiscal expenditure that collects taxes and pays them out and tax expenditure that collects less than otherwise due are deeply related, they should be bundled and managed as one from the planning stage."
Lee also said, "Because duties are mechanically divided, there may be a tendency to be cautious about speaking on another ministry's affairs outside one's jurisdiction," adding, "But for planning within the larger framework of national finances, the two ministries must consult closely and be linked."
To proceed as Lee pointed out, the spending and revenue functions might need to be consolidated into either the Ministry of Economy and Finance or the Ministry of Planning and Budget. Deputy Prime Minister for Economy and Minister Koo Yun-cheol of the Ministry of Economy and Finance said, "As the president said, fiscal expenditure and tax expenditure should be viewed together," adding, "Reviving the original intent of the deputy prime minister's office once coordinating this, we will conduct a full, fresh review of ministry functions and linkage systems and report back swiftly."