S. Korean consumers' fascination for expensive, unconventional fruit prompts farmers to switch crops
S. Korea to expand tax incentives for R&D, investments in chips, batteries, vaccines
South Korea will revise its tax code to provide tax benefits worth 1.16 trillion won for corporate research & development (R&D) and facility investment in semiconductors, electric vehicle batteries, and vaccines
Under the proposed revision, the government will raise the tax deduction rate by up to 10 percent when companies increase R&D on chips, batteries, and vaccines until the end of 2024.
The tax deduction rate will be hiked by 3 to 4 percent for corporate investment in those sectors.
The tax code revision bill will be submitted to the National Assembly for approval before Sept. 3.
The revision centers on underpinning a fast economic recovery and enhancing inclusive growth amid pandemic-induced deepening of income gaps.
The country designated chips, batteries, and vaccines as three key national strategic technologies.
Memory chips account for around 20 percent of South Korea's exports but the country has relatively lagged in developing non-memory chips, including system chips.
South Korean battery makers, such as LG Energy Solution Ltd., have to cope with competition from other global battery makers seeking to help secure a stable supply chain for EV batteries.
The pandemic also raised the need to secure "vaccine sovereignty."
Tax incentives for the three key sectors could reduce tax-payment burdens for conglomerates by 867 billion won. For small and midsized enterprises, tax burdens will likely drop by 308.6 billion won.