In the first half of this year, 10.1366 trillion won was collected in The Special Tax for Rural Development. The levy is automatically charged at 0.15% of stock sale proceeds, and with the market in a super boom, first-half revenue hit an all-time high. If this trend continues, annual collections are expected to reach the 20 trillion won range, more than double a typical year.
With The Special Tax for Rural Development flush like this, the Ministry of Agriculture, Food and Rural Affairs on Aug. 3 held a roundtable of experts, chaired by Minister Song Mi-ryung, to discuss ways to use the levy. People said the ministry was facing a "happy dilemma."
The Special Tax for Rural Development is transferred to and used in the Agriculture & Fisheries Structure Adjustment Special Account. Spending is limited to the following: ▲ projects to strengthen the competitiveness of agriculture, forestry and fisheries ▲ projects to improve the welfare of farmers, fishers and foresters and to supplement income ▲ projects to develop rural areas and expand industrial infrastructure ▲ repayment of principal and interest on deposits.
Accordingly, attention is on where the additional revenue from the levy will be used this year. Earlier, President Lee Jae-myung said it could be used as funding for a basic income program for rural communities, noting that revenue from the levy is surging.
The basic income program for rural communities provides 150,000 won a month in local gift certificates to residents who actually live in selected areas. The government had been running a pilot in 10 of the 69 counties designated as depopulating areas, and from this month it is expanding to 17. If expanded to all 69 counties nationwide that are depopulating areas, it is estimated to require 4.9 trillion won annually.
Also under discussion is using the levy as a funding source for the Agricultural Price Stabilization Fund to operate the produce price stabilization program that will begin this month. Under the program, when market prices for farm products fall below a government-set reference price, the state directly covers part or all of the difference. It is said that even supporting just the five major vegetables would require more than 1 trillion won annually.
Meanwhile, the Ministry of Finance and Economy is reviewing a plan to expand expenditure targets for the levy. This appears to reflect the fact that although an additional 940 billion won in revenue was collected from the levy last year, 444.9 billion won remained as unspent balances and carryovers.
In the agricultural sector, people say the levy must be used properly for programs that provide real help to rural communities and farmers, and there should be no unspent funds because recipients for projects could not be secured.