Choo Mi-ae: No Matter How Much Gyeonggi's Semiconductor Income Grows, Tax Revenue Remains the Same

Gyeonggi Province Governor Choo Mi-ae, over her first weekend since declaring a "fiscal emergency," emphasized the need for a restructuring of local finance for two consecutive days via social media.

In a post uploaded to Facebook on the 9th titled "The Cause of Gyeonggi Province's Illusion of Wealth," Governor Choo argued, "No matter how astronomically Gyeonggi's GRDP (Gross Regional Domestic Product) increases from the income earned by semiconductor companies in Gyeonggi Province, not a single won of tax revenue is added to Gyeonggi Province," adding, "This is why the illusion that Gyeonggi is wealthy occurs."

She continued, "Gyeonggi Province shoulders the firefighting costs to protect the increased population and industrial facilities while nurturing industries and building supporting infrastructure in the province, but the increased tax revenues from corporate growth do not return to Gyeonggi Province, nor do the ordinary local allocation taxes increased by those revenues return to Gyeonggi Province."

Governor Choo described this situation as a "double contradiction" and demanded a reform of local finance, stating, "Financial resources must follow where the burden lies, and the natural financial resources necessary to carry out regional government affairs must be recognized."

The previous day, Governor Choo also wrote on Facebook, citing the example of Gyeonggi Province bearing most of the labor costs for national firefighters, "National labor costs are the responsibility of the central government, but the reality is completely the opposite. Financial reform is urgent for region-led growth."

Previously, during a press conference on the 5th of this month, Governor Choo declared a "fiscal emergency," stating that a reduced supplementary budget of 770 billion won is inevitable, and is currently pursuing restructuring of the revenue structure, such as making corporate local income tax a joint tax source between Gyeonggi Province and its cities and counties, to overcome the fiscal crisis.

Meanwhile, Gyeonggi Province's local tax (provincial tax) revenue collected through July this year totaled 8.5967 trillion won, reaching only 51.7% of this year's total collection target of 16.0633 trillion won.

In particular, acquisition tax, which accounts for more than half of provincial tax, recorded 4.5565 trillion won in collections. If this collection trend continues, it is expected to fall short of the year-end collection target by about 300 billion won.

(Photo: Yonhap News)
※ Please note: This article was translated by AI and may contain errors.