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The government and the ruling party have set the standard for reducing the property tax to less than 600 million won from the official price. The standard for the transfer tax of the major shareholders will remain at more than 1 billion won. Initially, the ruling party issued an opinion to the government that the property tax reduction criteria should be set at a public price of 900 million won or less for a single owner. However, Hong Nam-ki, Deputy Prime Minister for the Economy and Minister for Strategy and Finance, voiced opposition over fairness with other taxes and lack of tax revenue from local governments. It was decided that the tense discussion from both sides would be less than 600 million won when the heads of the local governments joined the government. The ruling party’s opinion on the share transfer tax requirements was approved. The government pushed for a plan to lower the requirements to 300 million won on the basis of fiscal fairness, and the ruling party was in a position to maintain the current level, mindful of investors’ reaction. Over time, the party government stepped back on a case-by-case basis and found a compromise.
The reason that the party government has been fighting for a long period of time without reaching a conclusion on the requirements for the reduction of property tax and share transfer tax is because the activities of others are different The government emphasized the tax revenue aspect in consideration of increased tax expenditures, and the ruling party, ahead of the by-election of the mayors of Seoul and Busan next year, must have been aware of the vote. In the process, communication or cooperation between party governments was not smooth. Insisting on different arguments, only political uncertainty has grown.
When formulating economic policy, we must correct the attitude of the passport, which counts the votes first. The government, which is pushed back and forth by the ruling party, is also a problem. Only at the beginning of the stock transfer tax, Vice Premier Hong adhered to the policy of expanding ‘more than 300 million won’ as announced in the revision of the Implementing Decree of the Income Tax Law in 2017 Then, as the reaction grew, mainly from individual investors, he changed his words to change the sum of the family’s shares in individual calculations. As the opposition did not back down, a plan to lower it to more than 500 million won was also discussed, but in the end it was concluded that it stood at 1 trillion won.
On the 3rd, Vice Premier Hong expressed gratitude for taking responsibility for the market turmoil caused by the controversy over the share transfer tax. President Moon Jae-in rejected his thanks, but political conflicts between the party and the political parties should not continue in this way. The damage is entirely up to the people.
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