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DP calls to raise corporate tax for the wealthy, presidential office stays cautious

Published: 18 Jul. 2025, 20:27

Acting Democratic Party (DP) leader Kim Byung-kee, right, and DP deputy floor leader Moon Jin-seog, left, speak during a party policy coordination meeting at the National Assembly in Yeouido, western Seoul, on July 17. [YONHAP]

The Democratic Party (DP) ramped up calls on Friday to roll back corporate tax cuts for the wealthy, sharpening its stance after finance minister nominee Koo Yun-cheol said he would “actively consider” restoring the corporate tax rate during his confirmation hearing on Thursday.

Koo’s comments reignited political clashes over the Yoon Suk Yeol administration’s 2022 tax reforms, which reduced the top corporate tax rate from 25 percent to 24 percent as part of a sweeping 1 percentage point cut across all brackets. Despite the political momentum, the presidential office struck a cautious tone, stating that "there has been no discussion within the office.”

“The Yoon administration did something over the past three years that it didn’t have to do,” said DP deputy floor leader Moon Jin-seog at the National Assembly on Friday. “They claimed that cutting well-functioning taxes like the corporate tax would create jobs, boost consumption and stimulate investment, but none of those goals have been achieved.”

“You need taxes to run a country,” Moon added. “We must reverse the reckless tax cuts for the wealthy.”

While immediate legislative action remains uncertain, DP officials hinted that if this year’s tax revenue shortfall deepens, even the ruling party may have to engage in serious talks about tax increases.

“Given the seriousness of the tax revenue situation, the government should begin related discussions in earnest,” said a senior DP official.

Koo Yun-cheol, nominee for deputy prime minister and minister of economy and finance, speaks during his appointment hearing at the National Assembly in Yeouido, western Seoul, on July 17. [LIM HYUN-DONG]

National tax revenues have fallen short of budget expenditures for three consecutive years since 2022, according to the Ministry of Economy and Finance.

During Koo’s confirmation hearing, DP Reps. Park Hong-keun, Ahn Do-geol and Oh Gi-hyoung hammered home the call to “normalize the corporate tax rate.” Koo himself acknowledged the revenue crisis, noting that national tax income fell from 396 trillion won ($284.68 billion) in 2022 to 337 trillion won this year.

“Corporate tax revenue dropped from 100 trillion won in 2022 to about 60 trillion won last year, a 40 percent decline, amid stagnating growth, consumption and investment," Koo said.

Korea’s corporate tax landscape has been a political battleground for years: The Lee Myung-bak administration cut the top rate to 22 percent; the Moon Jae-in administration raised it back to 25 percent; the Yoon administration sought to lower it again, ultimately settling for a compromise 24 percent.

Now, faced with a ballooning fiscal deficit, the government has shelved plans for other tax reforms, including changes to inheritance and earned income taxes — even though the latter was a major campaign promise of President Lee Jae Myung.

Presidential spokesperson Kang Yu-jung speaks during a briefing held at the Yongsan presidential office in central Seoul on July 18. [NEWS1]

A DP official said of the earned income tax, “While the principle of honoring promises to the people is clear, given the difficult state of national finances, it is being considered as a long-term task.”

However, on Friday, the presidential office stated that there has been “no discussion within the office” regarding the restoration of the corporate tax cuts made under the Yoon administration.

At a briefing held that day at the presidential office in Yongsan, central Seoul, spokesperson Kang Yu-jung said that restoring the corporate tax rate “has not yet been publicly or officially discussed at a large-scale meeting,” adding, “I haven’t heard anything about it.”

Regarding the public discussions between nominee Koo and ruling party lawmakers, Kang said, “Answers at confirmation hearings reflect the nominees’ own opinions. While he is a ministerial nominee, it is unclear whether this will be discussed going forward,” and added, “All responses at hearings should be seen as personal beliefs and policy statements of the nominees.”

Translated from the JoongAng Ilbo using generative AI and edited by Korea JoongAng Daily staff.
BY SHIM SAE-ROM [[email protected]]