South Korean National Assembly moves to restore electronic filing tax credits

The South Korean National Assembly's Tax Subcommittee is moving to restore the electronic filing tax credit to its previous levels through a proposed amendment to the Restriction of Special Taxation Act. The move follows a government decision to reduce the credit amount by half via an enforcement decree, a measure taken without prior consultation with the legislature.

The proposed amendment aims to rename the credit to ‘taxpayer cooperation cost tax credit’ and codify the credit amounts directly into law to prevent arbitrary reductions by the government. It also includes provisions to establish grounds for additional credits for small business owners. The amendment was jointly introduced by lawmakers Jeong Tae-ho and Park Soo-young.

While the government argues that the policy goal has been met due to electronic filing rates exceeding 99%, subcommittee members criticized the reduction, noting that similar tax incentives for credit card usage have not been scaled back despite similar outcomes. The subcommittee plans to hold a final vote on the amendment in November.