National Assembly Budget Office (Chief Cho Euysup) held the Grand Debate on the 2022 Tax Reform Proposals on Monday, November 7 at 2 pm in meeting room 1 at the Member’s Office Building to seek a proper direction for the National Assembly’s deliberations on the government’s and parliamentarians’ tax reform proposals and discuss major issues.

Chief Cho Euysup delivered the opening remarks in which he underscored the important role of taxes amid increased economic uncertainties at home and abroad, such as accelerating inflation and base rate hikes. He hoped that the Grand Debate serves as a momentum to find a desirable direction for the National Assembly’s deliberation on the tax reform proposals and tax systems through an in-depth discussion.

Speaker Kim Jin-pyo said in his congratulatory remarks that preparing a balanced tax policy that considers political, social, and economic purposes together is important in a global complex crisis. With the National Assembly’s deliberation on the proposal ahead, he asked lawmakers to join hands and make tax laws that benefit the lives of the Korean people.

In his congratulatory address, Chairperson Park Dae-chul of the Strategy and Finance Committee asked for various opinions on rational and inclusive directions to build a virtuous cycle of growth and tax revenues, as spending requirements may last longer and heavier tax burdens are unavoidable. He added that as the chairperson of the Strategy and Finance Committee, he will make efforts to realize the optimal alternative.

Jun Joosung, Professor Emeritus of Ewha Womans University moderated the debate. Ko Kwang-hyo, Deputy Minister of the Tax and Customs for the Ministry of Economy and Finance, gave the first keynote speech elaborating on the main content and intention of introducing the 2022 tax reform proposals. The proposals were drawn up under the basic directions of economic revitalization, stabilization of the people’s lives, expansion of tax infrastructure, and creation of a taxpayer-friendly environment.

The second keynote address was delivered by Lee Jung-eun, Assistant Chief for the Estimates and Tax Analysis Department of NABO. He said this year’s tax reform proposals focused on the expansion of tax support to revitalize the economy. He added that the National Assembly must examine ways to expand the tax base in the mid- to long-term to minimize the uncertainties of tax policies and secure fiscal sustainability.

Rep. Shin Dong-kun of the Democratic Party of Korea assessed this year’s tax reform proposal as a tax cut policy for large companies and the high-income class. He asserted that the discussion should focus on a more active role of the budget to the extent it does not harm income redistribution.

Rep. Yoo Sung-kull of the People Power Party pointed out that the tax system has been distorted and said that the tax reform will normalize the system and relieve tax burdens for the taxpayer overall, further revitalizing the economy.

Rep. Jang Hye-yeong of the Justice Party criticized the proposal that while the role of the budget is more important than ever due to the economic crisis, the benefit of tax cuts is given disproportionately to a certain class. She added that introducing a carbon tax and other taxation measures should be considered to respond tothe climate crisis.

Prof. Yoo Ho-lim at Kangnam University saw the proposal as a tax cut for the rich that mainly benefits large companies, worrying that such a measure would reduce tax revenue and be abused to avoid tax. He underscored that the government still has a role for those hit hard by the pandemic.

Prof. Kim Woo-chul at the University of Seoul said as the tax base condition has improved recently, inducing companies to reinforce their competitiveness and invest in strategic industrial technologies through tax cuts was appropriate. He regarded the comprehensive property tax cut as a part of a normalization procedure to reduce the tax burden on the middle class, which increased in line with the asset prices.

NABO will share the results of the Grand Debate on the 2022 Tax Reform Proposals with the Strategy and Finance Committee of the National Assembly and the Ministry of Economy and Finance to be utilized at the National Assembly deliberation on the proposals.