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🇰🇷 South Korea /Elections & Politics

Choo Mi-ae Builds Momentum for Local Finance Reform Alliance with Chungbuk Visit

From Hankyoreh · () Korean

Translated from Korean and summarized by DistantNews. Read the original for the full story.

At a glance

News Named sources Context piece
  • Gyeonggi Governor Choo Mi-ae and Chungbuk Governor Shin Yong-han discussed joint proposals to address local governments’ financial pressures.
  • They agreed to seek the allocation of 5% of national corporate tax revenue to metropolitan governments and greater central government responsibility for firefighters’ salaries.
  • The governors also backed raising the local consumption tax rate from 25.3% to 40.3% through annual five-percentage-point increases.

Gyeonggi Governor Choo Mi-ae is turning local finance reform into a broader regional alliance, traveling to North Chungcheong after meeting Daejeon’s mayor last month. On the latest visit, she met Chungbuk Governor Shin Yong-han at the provincial government headquarters to discuss how local governments can regain fiscal room.

The two governors focused on a structure they described as deeply unbalanced. Local governments pay for the power, water, roads and other infrastructure needed by semiconductor and secondary-battery industries, yet they do not receive a corresponding share of the additional tax revenue generated by corporate growth.

The fiscal crisis is not a problem unique to Gyeonggi, so I came to think that we should solve it first.

· Choo Mi-aeThe Gyeonggi governor explained why she is seeking policy cooperation with other metropolitan governments.

Cheongju, home to companies including SK hynics and LG Chem, and Gyeonggi, which hosts the Yongin semiconductor cluster, both face large infrastructure costs. They agreed to jointly urge the central government and National Assembly to distribute 5% of national corporate tax revenue to metropolitan governments.

Gyeonggi and Chungbuk share major industries and face similar fiscal burdens.

· Shin Yong-hanThe Chungbuk governor described the basis for joint action on local finance.

They also discussed the cost of employing firefighters. Although firefighters became national civil servants, local governments still shoulder about 6.5 trillion won in annual personnel expenses nationwide, including more than 1 trillion won in Gyeonggi. The governors said they would examine whether expiring local tax sources, including the tobacco consumption tax, should support firefighter salaries or housing welfare, then develop a joint response.

They further agreed that the local consumption tax rate should rise by five percentage points each year, from its current 25.3% to 40.3%, as part of a stronger push for fiscal decentralization. Choo said the crisis was not unique to Gyeonggi and that she wanted to “solve it first.” Shin said the two provinces share major industries and similar fiscal burdens, adding that they would speak together to the government and parliament.

We strongly agree with the proposed solutions and will raise our voices together with the government and National Assembly.

· Shin Yong-hanShin pledged joint advocacy for the reform measures.
About this summary

Originally published by Hankyoreh in Korean. Translated, summarized, and contextualized automatically by DistantNews, with a note on how the source frames the story. Not individually reviewed before publishing. How this works.

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