Latest news with #LeeJaeMyung
Hans India
4 hours ago
- Business
- Hans India
South Korea: Lee govt unveils first tax reform plan aimed at increasing revenue
Seoul: The South Korean government on Thursday unveiled a comprehensive tax reform plan aimed at strengthening the national revenue base, which includes raising the top corporate tax rate and tightening capital gains taxation by broadening the definition of large shareholders. The reform marks the first major tax overhaul under President Lee Jae Myung, who took office early last month, and comes as part of the administration's efforts to restore fiscal soundness and address what it sees as tax benefits tilted toward large corporations and high-income earners, Yonhap News Agency reported. The government estimates the reform package will generate an additional 8.17 trillion won (USD 5.87 billion) in tax revenue over the next five years. According to the Ministry of Economy and Finance, the top corporate tax rate will be raised by 1 percentage point across all four tax brackets, effectively rolling back cuts introduced by the previous Yoon Suk Yeol administration in 2022. Currently, the corporate income tax is levied at 9 percent for an annual income of up to 200 million won, 19 percent for income between 200 million and 20 billion won, 21 per cent for income between 20 billion and 300 billion won, and 24 percent for income above 300 billion won. The latest proposal would increase the rate for each bracket by 1 percentage point, restoring the highest rate to 25 per cent. The conservative Yoon administration had cut the top corporate tax rate to 24 percent in 2022 to stimulate private sector investment. The proposed changes are subject to approval by the National Assembly. If passed, the revised corporate tax rates will apply to business income earned starting next year, with increased revenue expected to start materializing in 2027. In a separate measure to increase capital gains tax revenues, the government also plans to lower the threshold for being classified as a large shareholder from 5 billion won to 1 billion won. The move effectively reverses a policy introduced by the previous administration, which had eased capital gains tax obligations by raising the threshold for large shareholders from 1 billion won to 5 billion won. Under the current law, major shareholders in listed companies face a capital gains tax rate of 22 to 27.5 per cent, including local income tax. The tax applies to stock sales made during the previous year, regardless of price fluctuations. "The resources secured through these measures will be reinvested into businesses to support the development of ultra-innovative products," First Vice Finance Minister Lee Hyoung-il said during a press briefing. The reform is seen as part of President Lee's broader push to reverse the previous administration's tax policies, which the ruling Democratic Party has criticized as favoring the wealthy and large conglomerates. "Our revenue base has rapidly weakened over the past three years, leading to a significant rise in the nation's overall tax burden," Vice Minister Lee said. "This reform focuses on restoring the foundation of sustainable public finance." The plan also includes adjustments to the education tax levied on financial and insurance companies in place of value-added tax. For companies earning more than 1 trillion won in annual revenue, the education tax rate will be increased from the current 0.5 per cent to 1 percent, the ministry said. If realized, this would mark the first time in 45 years, since the education tax was introduced in 1981, that a new tax bracket and higher rate have been established. Additional measures aim to enhance the competitiveness of strategic future industries, including artificial intelligence (AI), by expanding R&D tax credits and investment incentives, officials said. Tax support for low- and middle-income households, as well as small business owners, will also be expanded to help stabilize livelihoods and support inclusive growth.
Hans India
5 hours ago
- Business
- Hans India
President Lee urges follow-up measures for South Korea-US trade deal
Seoul: South Korean President Lee Jae Myung urged the government on Thursday to closely monitor public concerns over the trade deal with the United States (US) and prepare follow-up measures to protect the nation's core interests. Lee made the call after Seoul clinched a trade deal with Washington to lower the reciprocal and auto-specific tariffs from the initial 25 per cent to 15 per cent in exchange for the $350 billion investment pledge and $100 billion US energy purchases, Yonhap News Agency reported. "It is expected to further bolster South Korea-US economic cooperation and the alliance," Lee said during a meeting with senior aides and secretaries. "Although we have overcome a big mountain, the reorganisation of the global trade order is expected to accelerate." With the deal concluded, Lee urged the government to address structural challenges facing the domestic economy by implementing measures to boost consumption and diversify export markets. "I want relevant ministries to closely monitor public concerns and thoroughly prepare follow-up measures to safeguard our core national interests," he said. South Korea avoided additional US market access demands in such sensitive sectors as beef and rice, Seoul officials said, but the new tariffs, set to take effect on Friday, have raised concerns over the export-reliant economy amid sagging domestic demand. Earlier in the day, the two nations announced a bilateral trade agreement that sets a 15 per cent tariff on South Korean exports to the US against the initially expected 25 per cent, and includes a pledge for $350 billion in South Korean investment in the US shipbuilding, energy and other sectors. The deal also applied the 15 per cent tariffs on automobiles, down from the current 25 per cent, while South Korea avoided additional US market access demands in such sensitive sectors as beef and rice. The new arrangement is set to take effect Friday (US time). "We have overcome a significant hurdle," President Lee Jae Myung said in his Facebook post. "The agreement eliminates uncertainty in our export environment and creates conditions to compete on equal or better terms with major countries."
CTV News
6 hours ago
- Business
- CTV News
Trump says U.S. will set 15% tariff on South Korean imports under new deal
WASHINGTON/SEOUL — U.S. President Donald Trump said on Wednesday the U.S. will charge a 15 per cent tariff on imports from South Korea, down from a threatened 25 per cent, as part of a deal that eases tensions with a top-10 trading partner and key Asian ally. South Korea also agreed to invest US$350 billion in the United States in projects selected by Trump and to purchase energy products worth $100 billion. The arrangement, announced after Trump met with Korean officials at the White House, came during a blizzard of trade policy announcements. Many countries are rushing to cut deals ahead of Aug. 1, when Trump has promised higher tariffs will kick in. 'I am pleased to announce that the United States of America has agreed to a Full and Complete Trade Deal with the Republic of Korea,' Trump wrote on Truth Social. The negotiations were an early test for South Korean President Lee Jae Myung, who took office in June after a snap election. He said the deal eliminated uncertainty and set U.S. tariffs lower than or at the same level as major competitors. 'We have crossed a big hurdle,' Lee said in a Facebook post. Trump said Lee would visit the White House 'within the next two weeks' for his first meeting with the U.S. president. South Korea will accept American products, including autos and agricultural goods into its markets and impose no import duties on them, Trump added. South Korea's top officials said the country's rice and beef markets would not be opened further, and discussions over U.S. demands on food regulations continue. Seoul appeared to have defended its non-tariff barriers while keeping its tariff rate on par with Japan and the European Union, said Citi economist Kim Jin-wook. 'While the headline figure looks like a huge win for the U.S., details appear to be favorable for South Korea,' he said. Devil in the details South Korea seems to have avoided the worst, agreed Cheong In-kyo, a former South Korean trade minister. But he also said opinions about the deal could change if the $350 billion was not well spent. It was not clear what the investment would involve, where the financing would come from, over what time frame deals would be implemented and to what extent their terms would be binding. Trump said additional South Korean investments would be announced later. Of the total, $150 billion is aimed at a shipbuilding partnership, while $200 billion would include chips, nuclear power, batteries, and biotechnology, Kim Yong-beom, the South Korean presidential office's policy chief, told a briefing. He said 'ambiguity is good,' while adding that negotiators had ensured there would be safeguards over how the funds were used. Existing investment plans by South Korean companies would be part of the fund, according to another presidential official. U.S. Commerce Secretary Howard Lutnick said in a post on X that 90 per cent of the profits from the $350 billion fund were 'going to the American people.' Kim said South Korea understands that to mean that some profits could be reinvested. The energy purchases would include LNG, LPG, crude oil, and a small amount of coal, he added. 'This is within our usual import volume,' he said, noting it might lead to a 'slight shift' in the country's mix of imports from the Middle East to more American sources. Lutnick said the energy purchases would happen 'over the next 3.5 years.' The tariff rate on South Korean autos would also be 15%, Lutnick said, which is down from the current rate of 25%. Lutnick also said semiconductor and pharmaceutical exports would not be treated more harshly than those from other countries. Steel, aluminum, and copper were not covered by the new deal. Scramble in South Korea South Korea is one of three Asia-Pacific countries that had a comprehensive free trade agreement with the United States, but that did not spare it from new tariffs. Negotiations took place in a turbulent political environment in South Korea with former President Yoon Suk Yeol removed in April after he was impeached for trying to impose martial law. Pressure on negotiators increased after Japan clinched its deal earlier this month. South Korea has been a particular target of Trump for its trade surplus and the cost of maintaining some 28,500 U.S. troops in the country to defend against North Korea. Last year South Korea posted a record $55.7 billion trade surplus with the United States, up 25 per cent from a year earlier. South Korean companies welcomed the deal, saying it would reduce uncertainty. Amid the last-minute push to reach a tariff agreement, Samsung Electronics inked a $16.5 billion chip deal with Tesla. LG Energy Solution also signed a $4.3 billion deal to supply Tesla with energy storage system batteries, a person familiar with the matter said. What we know about South Korea's trade deal with the US (Reporting by Trevor Hunnicutt and Ju-min Park; Additional reporting by Joyce Lee, Jihoon Lee, Hyunjoo Jin, Josh Smith, Ed Davies, and Jack Kim in Seoul; Writing by Trevor Hunnicutt and Josh Smith; Editing by Stephen Coates and Edwina Gibbs)
Korea Herald
6 hours ago
- Business
- Korea Herald
Lee calls for building next-generation power grid with focus on renewable energy
President Lee Jae Myung on Thursday called for establishing a next-generation power grid as he underscored the importance of shifting the country's power supply infrastructure to one that centers on renewable energy. "Energy transition has become an essential task," Lee said as he presided over a meeting of senior presidential aides. "On top of an artificial intelligence (AI) revolution, the supply of renewable energy through power grid improvement has become very urgent." Lee instructed the government to draw up measures to establish a next-generation power grid that lowers the inefficiency of long-distance power transmissions and makes use of cutting-edge AI technology. The presidential office said the government will turn South Jeolla Province into a hub for such a plan, noting the region's potential for supplying renewable energy. Kim Yong-beom, the presidential chief of staff for policy, said in a press briefing that the government plans to establish industrial complexes for renewable energy micro grids by using steel and petrochemical industrial complexes in the region. The government will allocate about 200 billion won (US$143 million) next year for a pilot project to establish a next-generation power grid by building microgrids in the region's university, airport and military units, and connecting them, according to Kim. The presidential official said Lee aims to nurture the country's energy industry into one akin to the chip industry, and eventually seek to export electricity technology and products. (Yonhap)
CBC
7 hours ago
- Business
- CBC
Trump says U.S. will set 15% tariff on South Korean imports under new deal
Social Sharing President Donald Trump said on Wednesday the U.S. will charge a 15 per cent tariff on imports from South Korea, down from a threatened 25 per cent, as part of a deal that eases tensions with a Top 10 trading partner and key Asian ally. South Korea also agreed to invest $350 billion in the United States in projects selected by Trump and to purchase energy products worth $100 billion. The arrangement, announced after Trump met with Korean officials at the White House, came during a blizzard of trade policy announcements. Many countries are rushing to cut deals ahead of Aug.1, when Trump has promised higher tariffs will kick in. "I am pleased to announce that the United States of America has agreed to a Full and Complete Trade Deal with the Republic of Korea," Trump wrote on Truth Social. The negotiations were an early test for South Korean President Lee Jae Myung, who took office in June after a snap election. He said the deal eliminated uncertainty and set U.S. tariffs lower than or at the same level as major competitors. "We have crossed a big hurdle," Lee said in a Facebook post. Trump said Lee would visit the White House "within the next two weeks" for his first meeting with the U.S. president. South Korea will accept American products, including autos and agricultural goods into its markets and impose no import duties on them, Trump added. South Korea's top officials said the country's rice and beef markets would not be opened further, and discussions over U.S. demands on food regulations continue. Seoul appeared to have defended its non-tariff barriers while keeping its tariff rate on par with Japan and the European Union, said Citi economist Kim Jin-wook. "While the headline figure looks like a huge win for the U.S., details appear to be favourable for South Korea," he said. Devil in the details South Korea seems to have avoided the worst, agreed Cheong In-kyo, a former South Korean trade minister. But he also said opinions about the deal could change if the $350 billion was not well spent. It was not clear what the investment would involve, where the financing would come from, over what time frame deals would be implemented and to what extent their terms would be binding. Trump said additional South Korean investments would be announced later. Of the total, $150 billion is aimed at a shipbuilding partnership, while $200 billion would include nuclear power, batteries, and biotechnology, Kim Yong-beom, the South Korean presidential office's policy chief, told a briefing. He said "ambiguity is good," while adding that negotiators had ensured there would be safeguards over how the funds were used. Existing investment plans by South Korean companies would be part of the fund, according to another presidential official. WATCH | Trump sent letters to governments this month outlining tariffs he would impose: Trump sends letters to numerous countries detailing tariff rates 24 days ago U.S. President Donald Trump sent letters to governments around the world on Monday, outlining the tariffs he would impose on Aug. 1. The recipients include Japan, South Korea and South Africa. Canada's July 21 deadline to reach a deal with the U.S. appears to remain. U.S. Commerce Secretary Howard Lutnick said in a post on X that 90 per cent of the profits from the $350 billion fund were "going to the American people." Kim said South Korea understands that to mean that some profits could be reinvested. The energy purchases would include liquefied natural gas, liquefied petroleum gas, crude oil and a small amount of coal, he added. "This is within our usual import volume," he said, noting it might lead to a "slight shift" in the country's mix of imports from the Middle East to more American sources. Lutnick said the energy purchases would happen "over the next 3.5 years." The tariff rate on South Korean autos would also be 15 per cent, Lutnick said, which is down from the current rate of 25 per cent. Lutnick also said semiconductor and pharmaceutical exports would not be treated more harshly than those from other countries. Steel, aluminum and copper were not covered by the new deal. Scramble in South Korea South Korea is one of three Asia-Pacific countries that had a comprehensive free trade agreement with the United States, but that did not spare it from new tariffs. Negotiations took place in a turbulent political environment in South Korea with former President Yoon Suk Yeol removed in April after he was impeached for trying to impose martial law. Pressure on negotiators increased after Japan clinched its deal earlier this month. South Korea has been a particular target of Trump for its trade surplus and the cost of maintaining some 28,500 U.S. troops in the country to defend against North Korea. Last year South Korea posted a record $55.7 billion trade surplus with the United States, up 25 per cent from a year earlier. South Korean companies welcomed the deal, saying it would reduce uncertainty. Amid the last-minute push to reach a tariff agreement, Samsung Electronics inked a $16.5 billion chip deal with Tesla TSLA.O. LG Energy Solution also signed a $4.3 billion deal to supply Tesla with energy storage system batteries, a person familiar with the matter said.
