During a comprehensive audit of the Ministry of Economy and Finance by the National Assembly's Planning and Finance Committee, lawmakers from both ruling and opposition parties raised questions regarding economic issues such as cryptocurrency taxation, taxation of global tech giants, investment in the U.S., the Future Response Fund, and the real estate market. Concerns were also voiced about the effectiveness of government policies, inter-departmental disagreements, tax equity, and accountability in policy implementation.
On cryptocurrency taxation, lawmakers from the Democratic Party and the People Power Party expressed differing views. Democratic Party lawmaker Yoon Hoo-duk urged for the prompt implementation of cryptocurrency taxation, which is set to take effect in January, after being postponed three times. He criticized the repeated delays, stating, "Countries like the U.S., Japan, Germany, and the U.K. have already implemented taxation. Each time we postpone, we say we will prepare, but we keep repeating the same story." He warned that repeatedly delaying legislation passed by the National Assembly could undermine policy credibility.
Conversely, opposition lawmaker Lim I-ja pointed out that the infrastructure for taxation is not adequately established. He noted discrepancies in the level of transaction information available between domestic exchanges, foreign exchanges, and decentralized exchanges, suggesting that without proper tracking of overseas transactions, the tax burden could disproportionately fall on honest investors. The National Tax Service also explained that it is difficult to secure 100% of overseas transaction data. Deputy Prime Minister and Minister of Economy and Finance Lee Hyung-il stated, "There are various opinions, so we will consider them carefully before making a decision" regarding the implementation of taxation.
The tax burden on global tech giants was also scrutinized. People Power Party lawmaker Kang Min-guk highlighted that Google Korea paid only 25.8 billion won in corporate tax last year, significantly less than Naver's 706.8 billion won. He argued that despite conducting business in Korea through advertising and app markets, Google Korea's structure of having its service contracts with a Singapore entity could violate tax equity with domestic companies. In response, Deputy Prime Minister Lee stated that he would analyze the recent ruling on the cancellation of Google Korea's corporate tax and consider necessary institutional improvements.
In discussions on investment in the U.S. and trade policy, the verification of business viability and policy coordination among government departments emerged as key issues. Democratic Party lawmaker Jeong Seong-ho pointed out the conflicting positions of the Ministry of Trade, Industry and Energy and the Ministry of Agriculture, Food and Rural Affairs regarding joining the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), urging the government to clarify its direction. Deputy Prime Minister Lee emphasized communication with farmers and stated that discussions would not be rushed, assuming membership by the end of the year. Regarding the Alaska liquefied natural gas (LNG) development project, lawmaker Yoon Hoo-duk inquired about which entity is reviewing its commercial viability, to which Deputy Prime Minister Lee responded that the South Korean government is conducting the review.
Criticism was also directed at the Future Response Fund, with lawmaker Park Soo-young from the People Power Party noting that the Ministry of Economy and Finance's objections to seven provisions of the Future Response Fund Act and three provisions of the National Finance Act were not reflected in the government's proposal. He raised concerns about the four-day legislative notice period, the movement of funds between different funds, and the handling of excess tax revenue. Deputy Prime Minister Lee explained that due to time constraints during the Cabinet meeting, it was difficult to make amendments, but he pledged to ensure that his opinions are continuously reflected during the National Assembly's review process.
Issues surrounding the supply gap in real estate and the promotion of the artificial intelligence (AI) industry were also significant topics. People Power Party lawmaker Lee Jong-wook expressed concerns about a potential supply shortage for at least two years before housing supply is expected to ramp up in 2028, asking for measures to stabilize the rental market. Deputy Prime Minister Lee acknowledged the difficulties in housing supply and emphasized a focus on long-term public rental housing that can be leased for over 20 years. Democratic Party lawmaker Kim Young-hwan urged improvements in financial and workforce conditions to ensure that the spread of AI leads to productivity gains while preparing for potential job losses and reduced consumption.
* This article has been translated by AI.
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