President Lee defends corporate inheritance tax reform as 'tax normalization'

President Lee Jae-myung has defended the government's significant overhaul of the corporate inheritance tax deduction system, stating that reducing "undue tax exemptions" is a necessary step toward the "normalization of taxation." The government's revised tax plan, announced earlier this month, introduces stricter conditions for utilizing the corporate inheritance tax deduction.

Key changes include a more granular segmentation of eligible business sectors, with specific exclusions for industries such as parking facilities, hospitals, and pharmacies. Furthermore, the required duration of business management has been extended from 10 years to 30 years, aiming to prevent the system from being exploited as a means of circumventing inheritance taxes.

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Is it fair to continue to provide inheritance tax reductions of tens of billions of won to these sectors?

President Lee addressed criticism of the reforms, particularly from business owners in sectors like transportation, retail, healthcare, and pharmacies, who are reportedly protesting the changes. Sharing a news article detailing these objections on his social media platform X (formerly Twitter), Lee questioned the fairness of continuing to grant inheritance tax reductions worth tens of billions of won to businesses in these specific sectors.

The administration views the reform as a move to ensure greater equity in the tax system. By tightening the eligibility criteria and closing perceived loopholes, the government aims to create a fairer playing field and ensure that tax benefits are granted based on genuine long-term business commitment rather than as a tool for preferential inheritance.

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Reducing undue tax exemptions is the path to normalizing taxation.