▲ President Lee Jae-myung greets Gyeonggi Province Governor Choo Mi-ae at the 10th Central-Local Cooperation Meeting held at the Blue House on the 26th.
Gyeonggi Province Governor Choo Mi-ae proposed tax reforms to the government on the 26th to foster region-led growth, including an increase in the regional consumption tax rate.
Attending the 10th Central-Local Cooperation Meeting presided over by President Lee Jae-myung at the Blue House, Governor Choo argued that the regional consumption tax rate should be raised from 25.3% to 40%.
Governor Choo explained that this is a way to realize the national policy task of achieving a 7-to-3 ratio between national and local taxes, and to improve an unstable revenue structure overly dependent on local property acquisition taxes.
She also proposed establishing a system to allocate a certain portion (5%) of corporate tax, a national tax, to metropolitan local governments.
The reasoning is that since the tax revenue increase resulting from the boom in cutting-edge industries such as semiconductors is currently attributed only to the central government and basic local governments, a fair revenue distribution structure is also necessary for metropolitan governments that shoulder the burden of creating industrial complexes and expanding infrastructure.
She further suggested converting the local education tax levied on tobacco, which is scheduled to expire, into a regional resource and facility tax for firefighting.
Even after firefighting personnel were converted to national public officials in 2020, national support for firefighting personnel expenses (fire safety allocation tax) remains merely at the 6% to 9% level, with the majority being covered by the general accounts of metropolitan governments.
Accordingly, she argued that a foundation for providing equitable firefighting services must be established through stable firefighting financing.
Governor Choo emphasized, "The reality I faced most immediately after taking office as governor is the very severe fiscal crisis of Gyeonggi Province, where mounting welfare demands and an unstable revenue structure combine to intensify fiscal pressure. Real region-led growth is only possible when local financial resources are secured. This is not just an issue for Gyeonggi Province, but a matter concerning the sustainability of local autonomy in South Korea."
(Photo: Yonhap News)
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