Kim Byung-ki, the acting leader and floor leader of the Democratic Party of Korea, on the 25th noted, "The national finances are facing a crisis," emphasizing that the tax system must be normalized to fundamentally resolve the revenue collapse during the Yoon Suk-yeol administration. He also announced the establishment of a "special organization for tax reform."
During that day's Supreme Council meeting held at the National Assembly, Acting Leader Kim said, "The Democratic Party will open the path to future growth through the realization of tax justice."
Acting Leader Kim emphasized, "The supplementary budget and consumer coupons for livelihoods are the catalysts for restoring the economy," stating, "We need to create growth following the recovery trend."
He continued, "However, Yoon Suk-yeol is hindering progress again. Current national finances are in a crisis situation. The normal operation of the country and investment in future growth engines are also facing difficulties. This is due to the revenue collapse triggered by the Yoon administration. This is not a situation that can be resolved by cutting back and reducing expenses."
He added, "The fundamental solution lies in properly establishing the twisted foundation of taxes," stating, "To this end, the Democratic Party will establish a 'special organization for tax reform' as a dedicated body within the party."
The organization will focus on normalizing tax revenue as a core task and will discuss specific measures to achieve tax justice. Acting Leader Kim said, "We will work closely with the government centered around the special committee," adding, "The realization of tax justice will serve as a catalyst for creating a virtuous cycle of innovative growth, investment support, domestic expansion, and economic growth."
However, Acting Leader Kim did not mention in public comments the 'separate taxation of dividend income' on which the party and government have differing opinions.
Under current law, financial income such as dividends and interest is subject to a comprehensive tax rate of up to 49.5% on amounts exceeding 20 million won. The government is considering introducing separate taxation of dividend income in its first tax amendment under President Lee Jae-myung's administration, while lowering the highest rate to the 30% range.
President Lee has also mentioned the need for "reforming the dividend tax system" as one of the ways to revitalize the capital market since his time as leader of the Democratic Party. During a senior secretary meeting the day before, President Lee remarked, "Improving the capital market system has a dual effect of increasing investment in innovative growth companies and boosting the income of ordinary individual investors," stating, "It is necessary to discuss the reform of the dividend tax system from this perspective."
However, within the party, there are significant concerns that in the situation of insufficient revenue, it does not align with the principle of tax equity. Jin, the chairperson overseeing party policies, stated that day, "Benefits may be concentrated among a very small number of people," and publicly requested a cautious approach to the reform of the dividend tax system.
The formation of the 'special organization for tax reform' appears to be a way to actively reflect the opinions within the party as the government is expected to present the tax amendment plan to be handled along with next year's budget bill at the end of this month.
Park Sang-hyuk, the chief spokesperson for the Democratic Party, met with reporters after the meeting regarding the 'special organization for tax reform,' explaining, "Tax issues are matters that need to be discussed in various ways during the regular National Assembly session," adding that, "This organization is intended to support such aspects within the party." He further noted, "We anticipate that there will be a process in which the party more actively gathers opinions and expresses them during the discussions on tax reform."