Rep. Heo Young “Resolving regional difficulties such as extinction crisis and regional gaps”
[에너지데일리 조남준 기자] A revised bill was submitted to the National Assembly regarding the differential benefits of national tax cuts and exemptions for relocated companies, which had been applied somewhat disadvantageously to border areas such as Gangwon-do and adjacent areas of the metropolitan area.
In addition, Democratic Party Member Heo Young (Chuncheon, Cheorwon, Hwacheon, and Yanggugap) removed the tax benefit period restrictions for companies relocating to small and medium-sized cities with a population of less than 300,000 on the 25th, while reducing corporate tax or income tax for start-up companies in border regions. It was announced that the representative proposed an amendment to the’Restriction of Special Taxation Act’.
According to Rep. Heo, the amendment added’a population requirement of 300,000 or more’ to areas that are relocated outside the metropolitan area overcrowded control areas, which are restricted by the tax benefit period, and are required by Presidential Decree. It is to remove the restrictions on the reduction and exemption for companies relocating to small and medium-sized cities with a population of less than 300,000.
The current law is required to reduce corporate tax or income tax by 100% for the first 7 years and 50% for the next 3 years for SMEs relocating outside the metropolitan overcrowding control area.
However, in the case of the growth management area and nature conservation area within the metropolitan area, metropolitan cities outside the metropolitan area, and’regions determined by the presidential decree’, 100% exemption is required for the first 5 years and 50% for the next 2 years. There is a difference in
The problem is that the criteria for selecting regions set by Presidential Decree are ambiguous, he explained. ‘Regions determined by Presidential Decree’ are “Gumi City, Gimhae City, Asan City, Wonju City, Iksan City, Jeonju City, Jeju City, Jinju City, Changwon City, Cheonan City, Cheongju City, Chuncheon City, Chungju City, Pohang City, Dangjin County, Eumseong County, Jincheon County, Hongcheon County (excluding Inner Myeon) and Hoengseong County. (Enforcement Decree Article 60 (3)).
In response, the Ministry of Strategy and Finance said, “We considered the connection with the metropolitan area and the size of the population”. However, Rep. Heo pointed out, “There is no regulation on this in any of the related laws,” he said. “It is questionable whether the enforcement decree on differential has not been revised for the past 10 years, so it properly reflects the difficulties that the provinces are experiencing.”
If the amendment is passed, Chuncheon City with a population of less than 300,000, Iksan City, Chungju City, Dangjin City, Hongcheon-gun, Hoengseong-gun, Eumseong-gun, Jincheon-gun, etc., will be 100% for the first 7 years and 50% for the next 3 years like other provinces. It is expected to be of considerable help in attracting companies as they will receive exemption benefits.
In addition, the revised bill required a reduction of 100% of income tax or corporate tax for the first five years and 50% for the next two years for companies that establish a business establishment or establish a business in the border area by 2023.
The’Special Act on Transboundary Area Support’ allows the state and local governments to provide tax support to businesses in the border area, but there is no relevant regulation in the current’Tax Special Case Restriction Act’. There is a lack of new incentives.
Rep. Heo Young emphasized the meaning of the bill and the urgency of passing it, saying, “It is a bill to bridge the difficulties faced by the regions suffering from extinction and the growing gap between regions.”
The revised bill was signed by a total of 11 members, including Congressman Heo, Byeong-ju Kim, Su-heung Kim, Sang-hyuk Park, Kuo Gu, Sang-beom Yoo, Jeong-ju Yoo, Chul-gyu Lee, Ho-seon Lim, Ki-ho Han, and Byung-do Han, members of the National Assembly.
Copyright © Energy Daily Unauthorized reproduction and redistribution prohibited