Economic groups have expressed their support for the inclusion of a domestic production tax credit in the government's 2026 tax reform plan. They anticipate that this new measure will contribute to the expansion of domestic production in advanced strategic industries and job creation, urging the government to quickly establish detailed criteria.
On August 7, six economic organizations issued a joint statement welcoming the government's decision to incorporate a domestic production tax credit aimed at strengthening domestic production capabilities, reflecting the opinions of the industrial sector.
The statement was made by the Korea Economic Association, the Korea Chamber of Commerce and Industry, the Korea Employers Federation, the Korea International Trade Association, the Korea Federation of Small and Medium Enterprises, and the Korea Federation of SMEs.
The economic groups noted, "In a competitive global environment where countries are striving to establish production bases for advanced industries, the decision to broaden tax support from the investment stage to the production stage is expected to help protect domestic production and jobs in strategic industries such as semiconductors, secondary batteries, solar power, wind power, key materials, and AI robot components, as well as assist companies in expanding their domestic production capabilities."
They further requested, "We hope the government will promptly establish detailed criteria, including eligible items and standard deduction amounts, so that the effects of the system can be realized in the industrial sector as soon as possible."
Additionally, they stated, "The introduction of regional coefficients for local-led growth and corporate tax support during the restructuring of the petrochemical industry is also expected to contribute to balanced growth and industrial structural transformation."
Finally, the economic groups affirmed, "The business community will continue to innovate and invest in line with this tax reform plan, focusing on expanding domestic production and creating quality jobs."
Meanwhile, the government announced on August 3 that it would establish a domestic production tax credit to support strategic industries with weak domestic production bases. This new tax credit will allow companies to receive deductions based on their production and sales performance in the country, shifting from the previous focus on research and development (R&D) and facility investment. The targeted sectors include semiconductors, secondary batteries, AI robot components, solar power, wind power, and key materials.
* This article has been translated by AI.
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