Gyeonggi Province Governor Choo Mi-ae stated on July 1 that she intends to work with the National Assembly to resolve the issue of establishing a joint tax base for corporate local income tax.
The proposal for a joint tax base for corporate local income tax involves transferring half of the corporate local income tax, which is currently revenue for cities and counties, to Gyeonggi Province. A portion would then be incorporated into the provincial revenue, while the remainder would be redistributed to the cities and counties in the form of adjustment grants.
The plan was previously reviewed as a key measure for expanding tax revenue by Governor Choo's transition committee.
Cities such as Yongin, Pyeongtaek, Hwaseong, and Icheon, which host semiconductor facilities for companies like Samsung Electronics and SK Hynix, are expected to collect hundreds of billions of won more in corporate local income tax next year, depending on this year's business performance.
Governor Choo, who signed the K-Semiconductor Innovation Measures for Semiconductor Super-Gap as her first official document on her first day in office, emphasized the need for a joint tax base for corporate local income tax, stating, "Massive financial resources must be secured to create conditions for a global semiconductor super-gap and to provide infrastructure support for the early completion of fabs."
She noted, "The current structure is such that corporate local income tax goes into the revenue of basic local governments, with none of it coming to Gyeonggi Province," adding, "This issue has been unofficially suggested to the central government."
Governor Choo particularly explained, "If touching local finances has been a zero-sum game until now, the conditions are now in place to create a win-win structure where local finances can create a virtuous cycle, so I am viewing this quite positively."
Governor Choo previously announced that she would form and operate a Gyeonggi Fiscal Innovation Task Force immediately upon taking office, and it is known that the joint tax base for corporate local income tax will be handled as a key agenda item.
The Fiscal Innovation Task Force is co-chaired by Democratic Party of Korea lawmaker Lee So-young and Cho Im-gon, a professor of public administration at Kyonggi University, and consists of 10 external members.
(Photo: Yonhap News)