Business leaders call for lower taxes

Local chambers of commerce join to press government to stick to tax policy


Representatives of one of the nation’s top private economic organizations on Thursday called for the government and politicians to stay committed to tax reduction to help the corporate sector.

“Tax reduction is necessary to enhance corporate competitiveness and attract foreign capital,” the heads of the country’s 71 regional chambers of the Korea Chamber of Commerce and Industry said in a statement.

They said that global rivals were exerting bigger efforts to form a corporate-friendly tax environment.

The statement also said that the government should implement policies based on market economy principles advocating corporate autonomy and free competition.

The calls from the business sector representatives came as the local political circle has been enmeshed in ongoing debate over whether to reduce taxes.

The government continues to advocate reduced corporate and income taxes to spur the economy, but the main opposition Democratic Party and even members of the ruling Grand National Party are opposed.

Tax reduction had been one of President Lee Myung-bak’s top policy pledges.
The corporate sector ― mostly the conglomerates ― also have recently been bristling over a campaign a blue-ribbon committee has initiated calling for companies to share “excess profit.”

“Tax reduction is a global trend and can effectively precipitate investment and prevent an outflow of capital,” Sohn Kyung-shik, the KCCI chairman, said on Thursday. “High taxation undermines corporate morale and may lead to a tax-dodging culture.”

Sohn also spoke out against excessive welfare support, saying that halving college tuitions and doling out free lunches at schools are “very rare in even the most advanced countries.”

The main opposition Democratic Party has touted these and other welfare campaigns to arouse both approval and dismay from the public and the political arena.

Sohn and the other business representatives touched on the need to bolster domestic demand, stressing that the economy must become more immune to changing external conditions.

The South Korean economy depends about 70 percent of growth on exports and it consequently vulnerable to fluctuations in the global market.

By Kim Ji-hyun  (jemmie@heraldcorp.com)