Korea to revamp fee and levy system, provide aid for key export items

Vice Prime Minister and Minister of Economy and Finance Choo Kyung-ho speaks at a cabinet meeting to discuss urgent economic issues and measures to promote exports and investment at the Central Government Complex, in Seoul, on May 17. [Photo by Yonhap]

The government announced Wednesday that it will look at revising regulations on financial levies other than taxes, in line with economic and social changes.

“There are about 90 financial levies imposed and about 74 percent of them have been in place for more than 20 years,” said Vice Prime Minister and Minister of Economy and Finance Choo Kyung-ho during a cabinet meeting to discuss urgent economic issues and measures to promote exports and investment.

According to a government assessment, 23 out of 90 financial levies are no longer practical or needed, such as fees levied on school sites and when traveling abroad.

“The existing financial levy imposed on small houses for school sites will be removed and exemption of 10,000 won ($7.46) for those traveling abroad will be raised to those below six-year-old from the current two,” said the minister. Levies on garbage disposal at residential facilities within workplaces will also be eased, according to the new government plan.

The government also unveiled plans to adopt an impact assessment system for levies.

“The government will seek to amend the framework legislation covering these levies to ensure that any new levy can be reviewed more strictly before being introduced, while existing levies can be revised, integrated or removed following an in-depth review,” said Choo, making assurances that there would be a fairer and more transparent system on levies, which can be a heavy financial burden on many households.

In the meantime, Choo listed key export areas during the meeting that the government would promote, including those from small- and medium-sized enterprises (SMEs), display panels and “blue foods,” a.k.a. seafood and fisheries.

“As SMEs are seeing weak exports due to sluggish exports to China, the government plans to come up with tailored support for them, mostly focusing on financial and infrastructure support,” Choo said.

In particular, SMEs with outstanding exports will be able to enjoy an exemption on the limit of aid applications they can apply for, allowing government support to be distributed multiple times, on a temporary basis throughout 2023. Small and medium-sized exporters in promising industrial areas can further enjoy special guarantees from the Korea Technology Finance Corp. of up to 550 billion won.

Concerning the export of display panels, the minister highlighted strategies to regain the country’s top position in the global market, highlighting the No. 1 spot that Korea held in the global display panel market share between 2004 and 2020.

As part of its overall strategy, the government will designate key display panel technologies as national advanced strategic technologies to promote investment from the private sector and to help build stable supply chains, alongside its support for policy financing, research and development and talent fostering. The Ministry of Trade, Industry and Energy will announce further details this week, Choo added.

Concerning the export of seafood and fisheries, the minister promised government support for export. “We will cultivate some of the rising export items, like oysters and abalone, along with steady key items, like laver and tuna, making them a strong export industry, and designate seafood export promotional zones near major ports to serve as export bases,” said Choo.