Deputy Prime Minister and Minister of Finance and Economy Koo Yoon-cheol said today (July 7) regarding whether to adjust both holding and transaction taxes during the upcoming real estate tax reform, "The two must achieve a balance."

In a phone interview on MBC Radio's "Kim Jong-bae's Focus" today, Deputy Prime Minister Koo stated, "We are preparing with the intention of making an announcement around the end of July."

He explained, "Fundamentally, we are looking at establishing a housing market centered on actual residents, based on the principle that a home is for 'living,' not for 'buying,'" adding, "The government will not decide unilaterally; I will listen to public opinion and voices from the field before making a final government policy decision."

When asked about various reports regarding the direction of real estate tax reform, such as adjusting the official market value ratio or reducing benefits for long-term ownership by non-residents, Koo avoided a direct answer, stating, "Those parts are also one of the public's opinions, so I will look into them."

When the host asked if it was appropriate to touch both holding and transaction taxes, he replied, "We are looking at them together from the perspective that the two must achieve a balance."

Regarding the "3 Major Mega Projects" currently being pushed by the government, Deputy Prime Minister Koo explained, "I believe the AI semiconductor revolution has a much greater civilizational significance than the construction of the Gyeongbu Expressway and the fostering of heavy chemical industries during the era of former President Park Chung-hee, or the IT revolution during the era of former President Kim Dae-jung." He added, "Fortunately, South Korea is well-prepared, and if we respond with an all-out effort and speed, it will be a tremendous opportunity."

Addressing concerns about regional concentration, he said, "We plan to utilize the entire country's landscape evenly," and explained, "For example, we are considering the Honam region as a second semiconductor production base following the capital area, the Chungcheong region for packaging, and the Yeongnam region for materials, parts, and equipment (so-bu-jang) needed for AI, viewing the entire Korean Peninsula as an AI semiconductor ecosystem."

Deputy Prime Minister Koo also mentioned plans for tax support, saying, "We will support research and development (R&D) and investment, and we are also considering carry-forward deductions if there are periods where taxes cannot be paid later, even if taxes are paid now."

He further added, "For those working in regional areas, we can provide more income tax deductions than for those living in Seoul, and in some cases, we can also consider support for children's education expenses," noting that "methods such as income deductions or tax credits are being reviewed while taking into account the wishes of regional workers."

Regarding the scale of corporate tax revenue following the semiconductor boom, Koo said, "It is said that hundreds of trillions of won in operating profit are being generated, but we have not yet accurately aggregated corporate operating profits," adding, "It will be possible to predict after receiving the first-half operating results and the interim corporate tax payments in August."

When asked to limit the scope to semiconductor-related companies, he said, "Looking at FnGuide's operating profit forecasts for this year, an operating profit of 600 trillion won is expected for Samsung Electronics and SK Hynix alone, and even if we take an average of 20 percent, it becomes an enormous amount of money," adding, "It is a structure where the two companies pay all the corporate taxes accumulated so far."

20 percent of 600 trillion won is 120 trillion won.

Regarding the plan for a "Future Response Fund" utilizing so-called excess tax revenue, Deputy Prime Minister Koo explained, "I would like to call it additional tax revenue," and added, "We are internally reviewing it to use it for future tasks for an irreplaceable South Korea."

When asked if a significant portion of the fund would be invested in additional power and water supply needed for the semiconductor industry, he replied, "Besides semiconductors, there are various innovative industries. We need to provide infrastructure support, such as R&D, for robots, physical AI, shipbuilding, and aviation," and cited AI education and startups for young people as examples.

Regarding the timing for unveiling a concrete blueprint, he said, "The Ministry of Economy and Finance is currently preparing it," and added, "Speed is necessary to the point that we should do it before the regular session of the National Assembly (September) if we can pass the relevant legislation."

Regarding next year's budget, which will also be submitted to the regular session of the National Assembly, he explained, "We will provide massive support to solve the problems our society faces, such as AI support, polarization, public livelihood, and structural innovation, and to move forward as a leading nation," adding, "Since tax revenue is good, we plan to determine the scale of fiscal spending by considering the revenue situation."

When the host mentioned that Samsung Electronics' second-quarter operating profit was 89.4 trillion won and expressed expectations for active fiscal policy, Deputy Prime Minister Koo replied, "I will do so."

(Photo: Yonhap News)