NABO holds Grand Debate on the 2019 Tax Reform Proposal
October 30, 2019
National Assembly Budget Office (Chief Lee Jong-hoo), along with the Economy and Finance Research Forum of the National Assembly (Co-president Kim Kwang-lim, Chang Byoung-wan), held the Grand Debate on the 2019 Tax Reform Proposal on Wednesday October 30th 2 pm at the Member’s Office Conference Hall to seek for proper principles and direction of the examination process of the government and assemblyman’s tax reform proposal by the National Assembly.
The opening ceremony consisted of opening remarks by Lee Jong-hoo, Chief of NABO, congratulatory address by Lee Choon-sak, Chairman of the Strategy and Finance Committee, as well as by Kim Kwang-lim, President of the Economy and Finance Research Forum. Professor Won Yun-hi of University of Seoul hosted the debate. The first presentation was given by Lim Jae-hyun, the head of the Tax and Customs Office for Ministry of Economy and Finance, elaborating on the main characteristics and the details of 2019 tax reform proposal including the directions on supporting economic and innovative growth, strengthening economic and social inclusiveness and fairness, expanding tax revenue sources and rationalizing the tax system, and etc.
Jeong Moon-jong, Assistant Chief for Tax Analysis and Estimates of NABO, evaluated that this year’s tax reform will see a reduction in revenue, focusing on revitalizing investment and boosting consumption. He also insisted that it is necessary to find a way to secure a stable but expansionary mid-to long-term revenue base and improve fiscal management efficiency considering the changes in the economic and social conditions. In the debate that followed, Kim Jung-woo, committee member of the Democratic Party positively evaluated that the reform proposal revitalizes the economy and supports innovative growth. He added that further discussion is needed in the areas of optimal level of tax burden ratio and taxation equity.
Choo Kyung-ho, committee member of Liberty Korea Party emphasized that the increase in corporate tax rate is a policy that does not conform to the recent economic environment, and that the direction of tax policy needs to be shifted toward revitalizing businesses.While pointing out the absence of bold tax reform in response to the expansionary fiscal policy,
Chae Yi-bai, committee member of Bareunmirae Party suggested policy directions such as securing tax revenue and restructuring expenditures. He emphasized that improving corporate governance is necessary prior to easing the taxation on inheritance of family business.
Park Hyungsoo, former president of Korea Institute of Public Finance asserted that this year’s tax reform is insufficient in terms of revenue expansion required for future expansion of fiscal expenditure. He added that it is necessary to prepare an institutional measure to maintain fiscal soundness and a mid- to long-term revenue expansion plan.
Park Myung-ho of Hongik University pointed out that the tax reform is insufficient in terms of expanding the base of tax revenue including setting the limit for income deduction for the high-income earners and extending the credit card income deduction system.
NABO will deliver the results of the Grand Debate on the 2019 Tax Reform to the Strategy and Finance Committee of the National Assembly and the Ministry of Economy and Finance for the tax reform evaluation by the National Assembly.