Bold Move on 'Fiscal Crisis'… Choo Mee-ae Launches Comprehensive Overhaul of Local Tax System

[Suwon Ilbo=Cheon Ui-hyun] Gyeonggi Province Governor Choo Mee-ae, who declared a ‘fiscal crisis’ for Gyeonggi Province, announced a comprehensive overhaul of the local tax system on the 6th.

Governor Choo posted on her Facebook, "The problem with Gyeonggi Province's fiscal crisis lies in the outdated local tax system," noting that now is the time to overhaul the local tax system.

Governor Choo stated, "Seoul, which has almost no factory facilities, ranks first in corporate local income tax revenue, while Gyeonggi Province, which is densely packed with factories, industrial complexes, supporting workforce, and research facilities, collects not a single won in corporate local income tax—a major difference from Seoul."

Governor Choo continued, "Gyeonggi Province bears enormous costs to maintain and develop industry. We prepare sites for factories, lay roads and railways, and supply water and electricity. In reality, we must endure air pollution, traffic congestion, and bear the burden of transmission towers and various industrial facilities that run through our region," she wrote.

Governor Choo further pointed out, "While bearing various costs and sacrifices, the tax revenue generated by corporate growth does not return to Gyeonggi Province."

On Facebook, Governor Choo revealed, "Gyeonggi Province's top tax source is property acquisition tax. In the past development era, we could sustain ourselves with this tax, but that era has ended and acquisition tax revenue is declining. It is estimated that next year's revenue will drop by 65%."

Therefore, Governor Choo stated, "The structure in which local governments that bear substantial costs to support industry cannot secure the tax revenue generated from that industry must be changed," suggesting a reform of the local tax system.