Six economic organizations propose lowering the highest inheritance tax rate to 30% in South Korea

On the 20th, six economic organizations, including the Korea Federation of Small and Medium Enterprises, the Korea Chamber of Commerce and Industry, the Korea Federation of Small and Medium Enterprises, the Korea Employers Federation, the Korea Businessmen's Association, and the Korea International Trade Association, submitted a petition to the ruling and opposition parties and the government requesting that the inheritance and gift tax be revised.
In a statement released on the same day, the six economic organizations said, "With the domestic and international economic environment showing signs of red light, bold reforms to the inheritance and gift tax system are necessary to quickly overcome the crisis.
In addition, Korea's top tax rate of 50 percent is the second highest among the 38 OECD countries, and the effective top tax rate will reach 60 percent if the largest shareholder's valuation is increased.
He pointed out that the current inheritance and gift tax system is restricting the global competitiveness of companies. South Korea introduced a valuation increase for the largest shareholder in 1992 and a maximum inheritance tax rate in 2000.
The six economic organizations explained that as a result of raising the high tax rate to 50%, the amount of inheritance tax determined will increase from 1.4 trillion won in 2013 to 12.3 trillion won in 2023.
These organizations said, "Companies are the core of the national economy, and removing obstacles to corporate management activities is a social issue," and "Companies that have relocated overseas due to excessive inheritance tax burdens,
"We need to get our heads together to prevent the chronic Korea discount from repeating, as well as the loss of value of companies sold to private equity and those that are closed," he said.
He also said, "Through open debate and deliberation between the ruling and opposition parties, the National Assembly should lower the highest inheritance tax rate to 30%, the OECD average, and abolish the valuation increase for the largest shareholder."
"I also hope that the government will pass a forward-looking reform bill for inheritance and gift taxes, such as expanding business inheritance deductions and special tax support for business succession gift taxes," he added.