South Korea's Finance Minister, Choi Sang-mok, announced that the government is set to introduce detailed tax incentives as part of a comprehensive corporate reform aimed at increasing the value of listed companies. In a media pool report released on Tuesday, Choi emphasized the government's commitment to gathering extensive feedback from market participants over the next few months to refine these incentives.
Corporate Value-up Programme
Minister Choi highlighted that the government will host multiple sessions in June and July to collect opinions from stakeholders before finalizing the annual tax code revisions. The "Corporate Value-up Programme," initially proposed in February, aims to enhance the value of listed companies through strategic tax benefits and corporate reforms.
Balancing Fairness and Effectiveness
Choi assured reporters that the authorities are focused on balancing fairness and effectiveness while preparing the tax benefits for companies participating in the program. The government intends to offer tax cuts on corporate income for companies that improve shareholder returns and on dividend income for shareholders.
Support for Semiconductor Industry
In addition to corporate tax incentives, the government will unveil detailed measures next month to bolster the country's semiconductor industry. Choi reiterated that continuous improvements would be made to the recently announced policy package to enhance the global competitiveness of South Korea's domestic companies.
Free Trade Agreement
South Korea, an export-driven economy, expressed optimism about the support for a trilateral free trade agreement (FTA) with Japan and China. This sentiment was reinforced at a recent trilateral summit where leaders from the three countries agreed to expedite negotiations for the FTA.
Economic Outlook
On the domestic front, Choi projected that consumer inflation would likely stabilize in the mid-to-lower 2% range in the latter half of the year. He also forecasted higher tax revenue in 2024 compared to last year, although corporate tax income has been weaker than expected so far.
By implementing these detailed tax incentives and comprehensive support measures, South Korea aims to enhance the value of its listed companies and strengthen its critical chip industry, ensuring sustained economic growth and global competitiveness.