Differentiated Taxes Needed for Non-Capital Regions: A Call for National Balance

The stark economic divide between South Korea's capital region and its non-capital areas is not merely a matter of perception but a quantifiable reality, as evidenced by tax revenue statistics. Jeonbuk province, for instance, accounts for a mere 1.8% of national earned income tax and 1.4% of corporate tax, starkly contrasting with the overwhelming dominance of the Seoul metropolitan area. This imbalance fuels a vicious cycle where businesses, jobs, capital, and talent are overwhelmingly concentrated in the capital, leaving regions like Jeonbuk struggling for survival, with many areas classified as high-risk for population extinction.

To counter this, the article strongly advocates for a fundamental shift in fiscal policy: the implementation of differentiated tax systems for non-capital regions. This is not about a simple tax cut but a strategic recalibration to create genuine incentives for companies to relocate or invest outside Seoul. The author points to international precedents, such as Israel's regional tax differentiation and Switzerland's cantonal tax variations, as proof of concept for how such policies can stimulate investment and employment in less developed areas.

The argument is grounded in economic analysis, referencing a 2020 report that projected up to 50 trillion won in investment increases and significant multiplier effects from a modest reduction in corporate tax rates for non-capital regions. This underscores the potential economic benefits of such a policy, not just for the targeted regions but for the nation as a whole.

From the perspective of regional chambers of commerce, like the Jeonbuk Chamber of Commerce and Industry, this is a critical juncture. They have united with counterparts across the country to lobby for legislative changes, culminating in the co-sponsorship of a bill for differentiated non-capital region taxation. The urgency is palpable: without decisive action to correct the structural imbalances created by policy, the gap will widen, and regional decline will become irreversible. This is presented not as an option, but as an essential strategy for the sustainable future of balanced national development.