SEOUL : South Korea on Thursday proposed tax cuts to encourage companies to shift operations back home and nurture the biopharmaceutical and visual entertainment industries, to stimulate domestic growth and reduce reliance on traditional manufacturing sectors.
The 31 proposals will reduce tax revenue by 471.9 billion won over the next five years, the ministry estimated. That compared with 13.1 trillion won for proposals last year, which were only partially approved by parliament where the main opposition party holds a majority. The proposals come as slowing economic growth is yielding lower tax revenue. The government expects the economy to grow 1.4 per cent this year - the least in three years - and 2.4 per cent in 2024.
It said tax exemption rates for visual content production should be raised to a maximum 30 per cent from 3-10 per cent, and that the biopharmaceutical sector should be added to a list of industries eligible for higher tax breaks on investment.