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South Korea Confirms Fiscal Support For The Economy

by Mary Swire, Tax-News.com, Hong Kong

31 July 2014


During his participation in a forum on July 28, South Korea's Minister of Strategy and Finance, and Deputy Prime Minister, Choi Kyung Hwan confirmed that the Government's future tax policies will be designed around the pressing need to provide a boost to the country's economic recovery.

Given the continuing fragile nature of the recovery in South Korea, with low household income and weak domestic demand, Choi indicated that the Government is planning to provide around KRW26 trillion won (USD25.4bn) in fiscal measures during the remainder of this year, and disclosed that stimulus policies could well continue into next year, and possibly also into 2016.

He stressed that his proposal to tax additional corporate cash reserves was not being drafted to extract more tax revenue, but to incentivize the release of those funds for increased consumer and investment expenditure.

Choi expected to be able to release details of all of the Government's tax revisions early in August, but, in the meanwhile, confirmed that the Government has no plans to alter the corporate tax rate itself. It has already indicated that tax incentives are expected for corporates that raise average employee wages or create jobs.

TAGS: Finance | tax | economics | tax incentives | fiscal policy | corporation tax | ministry of finance | Korea, South

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