Chey Tae-won Questions Effectiveness of a Uniform Corporate Tax Cut
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Chey Tae-won (pictured), chairman of the Korea Chamber of Commerce and Industry, the nation’s largest economic organization, said, “I wonder if it is good to lower the corporate tax for all businesses,” and asked why the government should cut taxes for businesses that do not invest when taxes are lowered. He called for customized tax cuts after closely considering investment effects against tax rates instead of a uniform corporate tax cut.
In a meeting with the press at the Korea Chamber of Commerce and Industry in Jung-gu, Seoul on December 21, Chey received a question on corporate tax cuts and said, “By all means, I am not saying we should not cut taxes,” and added, “But uniformly lowering the corporate tax? I wonder if that is a good thing.” He also said, “In the past, a uniform policy was fully effective, but now there is a need to customize the policy.”
Chey suggested customizing the corporate tax rate, because businesses face different situations depending on the industry and region. He pointed out that a uniform corporate tax cut could actually be inefficient. Chey said, “In some cases, there is no need to cut the corporate tax,” and explained, “They think that by lowering the corporate tax, they will encourage investment. But then there is the question of whether we should cut taxes in places where investments are not made.”
Chey mentioned crisis management as a key task that businesses would ask of the government next year. He said, “There will be many people who newly fall into the vulnerable category after they drop back due to the shock (of an economic recession),” and argued, “Taking care of this issue will be an important task next year.” He further said, “If this problem grows, it will bring about another social problem,” and added, “We need policies to minimize the impact.”
As for the global economy, Chey expected our businesses to face a “split market” next year.
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